Why is record retention so important for unclaimed property compliance? As you probably know, unclaimed property retention requirements vary based on each state’s rules and regulations. Depending upon the property type and state, record retention periods can take up to 10 years, plus the dormancy period dictated by the property type. Theoretically, this means you could end up retaining records for up to 20 years.
A good practice would mean your organization is retaining documentation of all pertinent information regarding your “lost property owners.” Thus, you would have either a paper or electronic trail should you ever have to comply with an audit. Failure to maintain these documents for the required length of time could put you at risk for a grueling and potentially costly audit!
The process in which companies retain and organize their unclaimed property supporting documentation is up to each organization. With today’s technology environment, you may want to consider digital retention, which is likely the most cost-effective solution. It is best to have internal policies and procedures in place and regular reviews of all state changes as part of these policies.
The following items are examples you may wish to retain as documentation as these could be pertinent in your record retention efforts:
· Gift cards
· Checks
· Customer correspondence
· Investment histories
· Safe deposit box contents
· Certified mail
To ensure consistency throughout your organization, a good practice would be to implement training for all departments and executives involved. Review policies and procedures regularly and modify reference materials so all staff have access to valid "living documents" they could use to manage the entire unclaimed property process successfully.
Developing, following, and monitoring unclaimed property record retention procedures could save you valuable time and resources, thus allowing your organization to focus on core business activities. It could also potentially save you from a costly and time-consuming audit!
Author: Jan Knott
Account Executive
Labels: UP Best Practices, UP Compliance
