South Dakota Governor Signs Law to Immediately Liquidate Lost Property in Its Possession
New Law Also Decreases Period for Owners to Claim Lost Property from One Year to 90 Days
On March 10, 2017, Governor Dennis Daugaard signed into law Senate Bill 24, which requires the state treasurer to immediately sell all securities, including mutual fund shares, that have been deemed lost or abandoned. This change, which amends South Dakota’s existing unclaimed property law, enhances the state’s coffers quickly at the expense of South Dakota’s shareholders.
In addition to requiring the state Treasury to immediately sell all abandoned property in its possession, the amended law also requires any stocks, bonds, or negotiable instruments that are deemed abandoned after March 10 to be sold 90 days after they are turned over to the state. Fortunately, due to a drafting error, mutual funds are exempt from this portion of the new law.
Today, there are 150,000 South Dakota households owning $42 million in mutual fund assets—all of which are at risk of falling victim to the South Dakota state treasury’s grab for funds.
Before this change, the treasurer could not sell such property until it was held for one year. This one-year period was designed to provide time for the state to reunite the owner with his or her lost property. As of March 10, property owners who have not claimed their property within 90 days risk the liquidation of their “abandoned” financial assets. Liquidation denies the owner any appreciation from market growth or growth from the continued reinvestment of dividends. It may also subject the owner to taxes and tax penalties. These proceeds are held by the state for the owner to claim at a later time, though few owners ever receive their funds.
What You Can Do
ICI encourages retirement savers to take these steps to protect their accounts:
- Contact your financial institutions annually to maintain contact and confirm your address is current.
- If you are a South Dakota resident, urge Governor Dennis Daugaard and your state representatives to revisit these laws and to reinstate necessary protections for South Dakotan savers.
- Learn more about what you can do to protect yourself and your assets.
ICI is working to educate fund shareholders like you about this practice. This resource center provides resources to help you find “lost” accounts and to give you the information you need to protect yourself in the future.