Let's get it together Ontario for the sake of all residents (and former residents)

The submission deadline for Ontario's unclaimed Property Program has been delayed until Sept 18th. I guess the thought is that we are already 40+yrs behind the US & so what’s a few more weeks especially when the weather is so delightful.

But sadly, this is the second try for Ontario (!)

Ontario was the first province to pass Unclaimed property legislation in Canada (1989). 22 years later it was still not in force and the Bill was repealed.

Of my many suggestions to the Attorney General here is one….

No more push to paperless until Canada gets all Provinces onboard with Unclaimed Property Legislation.

Yesterday I got a note from my RESP provider (Invesco Trimark). No more PRINTED semi-annual statements effective 2014. Not cool because this increases the risk that any funds with Invesco Trimark will go unclaimed. But Age Unfriendly as well. Do all Invesco Trimark Investors have online access? Really? 

The US considers such legislation as an important component of Consumer Protection Legislation-and it is! So...why are we some 40 years behind? The US has $58B in unclaimed funds/property despite the program but searching for assets is much easier.

In Canada ? The total is at least $4B and the searching is difficult. 

Read more on submissions to Ontario's Unclaimed Property Program

Before you go…Mr. Carney:

(An open letter to Mark Carney)

There’s been a fair bit of ongoing analysis and controversy surrounding the remarks you made some months ago about Corporate Canada sitting on huge piles of “dead money” on their balance sheets that could be better utilized to feed the economy or failing that; returned to investors.

Stop sitting on your cash piles, Carney tells Corporate Canada

Financial Post Aug 22 2012

Free up 'dead money' Carney exhorts Corporate Canada

The Globe and Mail Aug 22, 2012

Canada's corporate 'dead money' grows as consumers fall deeper in debt

Toronto Star Sept 17 2012

Dead Money

Canadian Business Feb 12, 2013

Ottawa's 'dead money'

Ottawa Business Journal Dec 3 2012

Carney urges firms to spend cash or return to shareholders

CBC News August 23 2012

Estimates vary but it seems that the total balance of ‘dead money’ has increased as much as 40% since 2009; and may total as much as $526 Billion… and that has you concerned. 

That is indeed a lot of cash.  No question there.

But, as you head out on your new adventure and leave the Bank of Canada,  I think it’s only fair to point out that corporations are not alone in holding onto ‘dead money’ that could be better utilized to grow the economy.

I am a bit embarrassed to point out that our own highly respected Bank of Canada which you have so masterfully governed for the past 5 years, is itself currently sitting on $500Million in unclaimed funds which I think we could agree may also be described as “dead money” and money that could be much better utilized to feed the economy….if not the actual owners.  That might be possible, if only the Bank of Canada took a more proactive approach to finding those owners.

Indeed, the rise in the balance of unclaimed funds in the Bank of Canada certainly appears to rival the rise in ‘dead money’ in Corporations with an increase of 55% over the past 5 years (!) That’s an extraordinary increase on an extraordinary balance of ‘dead money’ given that the this balance of $500M only includes amounts turned over by federally (not provincially) regulated banks, and only after 10 years of inactivity and only where those accounts are held in Canadian dollars (no foreign $ amounts). 

Alas, despite this extraordinary increase on an extraordinary balance on a population of only some 34M Canadians, very little awareness and very little effort seems to be being made in trying to locate owners. Granted, the Bank of Canada does update this balance once a year and provides an online database for unclaimed funds; whereas, the same treatment is not afforded to the balance of Unclaimed/Matured Canada Savings Bonds which are also piling up at the BoC. 

It is not a published number but I understand the value of Unclaimed/Matured Canada Savings Bonds totaled $259M as of this past April which I believe would make that an increase of $147M or 231% or over the past 5 years. 

Extraordinary and Sad at the same time.

So, using the same argument you have made for ‘dead money’ in Corporate Canada…for the sake of the economy AND in this case, for the sake of Canadians generally, don’t you think we could put a little more effort into reuniting this money with owners?  

This is after all, the age of technology so one would think we could apply a little technology to finding owners and making things right. But as well,  if some inspiration is needed into this challenge, we can also look south for some good ideas given that the US has had consistent & comprehensive unclaimed property legislation in place for 50+ years. In the US, unlike the situation in Canada, unclaimed property legislation is an  important part of consumer protection legislation. Sadly, that's not the case in Canada; but it should be. Each state in the US has enacted unclaimed property legislation requiring the transfer of all unclaimed property to  that State who then takes a very proactive role in helping to return assets to owners. 

So before you go...perhaps you and Mr. Poloz could give the 'dead money' in the Bank of Canada some thought. 

Brenda Potter Phelan 

Legacy Tracker Inc.

Oakville and Cambridge ON

What if that certified cheque or M/O you provided years ago was never cashed??

Maybe we can brighten up your cold and rainy Tuesday

Cold and rainy Mondays are difficult enough to motivate you back into the work week. But cold and rainy Tuesdays after   long weekend are even more so.  But perhaps  we canbrighten up your day.

Maybe…you haven’t thought about checking the Bank of Canada unclaimed funds website because you are pretty careful about providing the bank with your forwarding address and you have not left any old bank accounts behind….but there might be another reason to check. 

But…have you ever provided a certified cheque or a money order?

More specifically, what if a certified cheque or money order you paid for never was cashed?

In the case of both of these kinds of transactions, they are deducted from your account when the Bank draws them up for you but what if you never gave the certified cheque or the money order to the payee as you had intended for whatever reason or what if that payee never actually cashed that payment?  It becomes an unclaimed amount.

A review of the Bank of Canada website shows that there are plenty of those kinds of transactions – enough to make it worth your while to check

Please do and let us know if you come across some of those kinds of transactions or a bank account you or a loved one had forgotten about.  And if you have any other questions about unclaimed funds we would be happy to try and help you answer them

Link to Bank of Canada Unclaimed balances

USA Unclaimed Property Balance hits $58 Billion yes $ 58 Billion

 

It looks like the unclaimed fund balances have recently  been updated by each State, federal and other organization as required in the United States as a new figure is being quoted for the total held. Ready....?

The new estimated value for unclaimed property is now ...$58 Billion.

Again, sad but true. That's a lot of money as it works out to approximately $186 per resident of the US. Imagine if that money was all put to use in the economy.

The list of assets included in what the US defines as unclaimed (or abandoned) property (or sometimes referred to as unclaimed assets or unclaimed funds) is quite wide ranging in the US and actually getting wider.

Common forms of unclaimed property in the US includes savings or chequing accounts, stocks, uncashed dividends or payroll checks, refunds, traveler's checks, trust distributions, unredeemed money orders or gift certificate/cards (in some states), insurance payments or refunds and life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safety deposit boxes.

Here's some further detail on this $58 Billion estimate:

·        $300 Million in pension benefits from employment owed to 38,000 individuals

·        $16 Billion worth of matured US savings bonds (more than 45 million bonds)

·        $153.3 Million in tax refunds that were not deliverable by the IRS

·        $1 Billion in unclaimed insurance policy proceeds

·        $41.7 Billion in unclaimed funds held by individual states.

This last figure of $41.7 Billion is worthy of some further explanation. .

While rules vary slightly between each state, specific types of property are considered as being ‘abandoned’ or unclaimed when there has been no activity for 1-5 years. At that point, all financial organizations or any organization holding such property or funds are required to turn them over to the State Treasury.

Each state then takes over the search for owners through websites, newspaper ads, and booths at Malls and events like State fairs and Exhibitions. While searching for the owners, the State can use those assets to fund government operations but the owner’s claim to the property remains intact. Of the $58 Billion in unclaimed funds that has been reported, $41.7 Billion is being held by individual States. .

"The money belongs to the owner in perpetuity. Even if the owner dies, then their heirs could come back and claim it," said Carolyn Atkinson, West Virginia's deputy treasurer for unclaimed property and a past president of National Association of Unclaimed Property Administrators.

More on this story:

WPTV news story on unclaimed funds

To learn more about the National Association of Unclaimed Property Administrators and for a link to all State databases : NAUPA Website

$1 Billion in life insurance benefits remain unclaimed in the US

CBS Morning News did a story in the past week or so related to a recent Consumer Reports investigation. But beware.  The video you are about to watch could make you weep both for the individual that purchased and paid for a life insurance policy with their hard earned tax paid money and the beneficiary who has not claimed said policy.

CBS News Story on $1 B in life insurance benefits remain unclaimed

Reporter Mellody Hobson notes:

·        $1+ billion in unclaimed benefits

·        1 in 600 people have unclaimed benefits

·        Payouts range anywhere between $2,000 - $300,000

·        The insurance company has no legal obligation to look for the beneficiary

·        The insurance companies say that $1B in unclaimed policies is a minor problem

What makes this story and the situation all that much worse is that the reporter touches on a really unjust manoeuvre made by some insurance companies and much litigation has resulted. Ready? Some insurers were up until recently using 2 different systems within their 1 organization which went like this:

·      Certain insurers ran the Government’s social security ‘death master file’ against their annuity records in order to find & terminate annuity payments to those deceased annuity holders but

• The same insurers did not run the Government’s social security ‘death master file’ against insurance policy information in order to terminate payments collected from those deceased individuals for insurance policies or in order to pay out a life policy benefit to beneficiaries. As the reporter notes…”they kinda didn't want to know that you died so they can keep the premiums coming until they find out you have passed away”.

The Bottom Line ?

As the reporter concludes

“Ultimate responsibility lies with beneficiary. It sounds so mundane but so many people don’t tell their loved one where the policy is, what the company is and that they are a named beneficiary”. 

So:

·        Know what you own

·        Know what other loved one’s own

·        Know where your spouse’s life insurance policy is

·        Make sure beneficiaries are up to date

·        Make sure your beneficiary knows where your policy is

This story supports the reason why we built Legacy Tracker.

Too many assets including insurance policies are being left unclaimed. The detail that you or a loved one needs to provide about existing life insurance policies is a key template built into Legacy Tracker

And the situation in Canada? pretty murky.

We don't really talk about it and insurance companies don't talk about it. What is the value of unclaimed insurance benefits in Canada? It's anyone's guess but some within the industry estimate that 20-30% of insurance policies do not get cashed. I am not sure I want to estimate what that total value $ would be; I just know we need to reduce that figure. Please.

 

Life is Complicated; Death More so; Get yourself organized

Life is.... complicated but death is even more so...


Get your stuff together (please)....

This is a poster I have kept from the Wall Street Journal since it was published in 2011  (WSJ/ Saabira Chaudhuri)

It was a fascinating poster and a fascinating story which talked about the financial consequences that befalls your family and loved ones if you fail to keep all your documents and important papers in order. In the US where they track, report and actively look for owners of unclaimed funds they know that the toll is great. $33B approximately in unclaimed bank accounts and other assets like paid up insurance policies.

Read the full article here:  Organize your documents

Sad but true. Another $48 Million gets added to the pile at the Bank of Canada

$48.4M of new (but dormant) money gets added to the big pile of unclaimed money at the Bank of Canada for 2012

 

Short on explanations but the Bank of Canada has updated the page I stalk on a regular basis and this is what it says:  

 ·         The balance at the end of 2012 is $496M from 1.3million accounts

·         The B of C paid out $17.4M to account holders

That’s about it. That’s all it says I am afraid. But this is what I can tell you because I keep notes based on my visits to the site:

·         The balance at the end of 2011 was $465M based on 1.3 million accounts

·         That’s a net increase of $31M

·         If 17.4M was reunited with long lost owners in 2012 then that means ….

·         $48.4M of new unclaimed money (see my note about what this does not include below ).. came into the BoC ? WOW.

Last year by comparison, the Bank paid out 15.8M to owners and the new money came in was $50M . So I have 2 questions:

1)    Isn’t that a lot of money for a Country of 34.6 Million or so???

2)    Am I the only one worried about this?  

A quick note about what Unclaimed funds do not include at the Bank of Canada

Deposits in any currency other than Canadian, RRSP's, Credit Union Accounts, Canada Savings Bonds or the contents of safety deposit boxes . There is no official reporting for these numbers...one can only guess.

But…It’s time to update my chart. Because I like to track this problem.  So a $31M net increase  in the unclaimed fund balance amounts to …a 6.7% increase which according to my records, is just under the net increase from the year prior and..that would be a 55% increase over the past 5 years!?! YIKES...WOW. That's a lot of missing money.

Bank of Canada Unclaimed Funds	Not including Credit Unions or Non CDN deposits
Balance at Dec 2012	1.3 million accounts totaling $496 million ; up 6.7% in 1 year
Balance at Dec 2011	1.3 million accounts totaling $465 million up 7.39% in 1 year
Balance at Dec 2010	1.3 million accounts totaling $433 million up 9.62% in 1 year
Balance at Dec 2009	1.3 million accounts totaling $395 million up 23.44% in 2 years
Balance at Dec 2007	938,000 accounts totaling $320 million
5 Year increase	362,000 accounts totaling $176 million up 55% in 5 years
Balance at Dec 1998	770,000 accounts totaling $132 Million
14 Year increase	530,000 accounts totaling $364 Million up 276% in 14 years
14 Year increase in value %	276%

We see 2 solutions to this problem:

Every province in Canada needs legislation like the US has had for 40+ years to ensure that unclaimed funds are:

a.     Defined, accounted for and reported on by any organization that holds such financial assets. Consumers deserve more transparent reporting by way of easily accessible and available search bases. We have the technology. Let it be utilized!

b.    Forwarded to a provincially regulated agency for safekeeping who will also be charged with proactively looking for the owners of such funds

And:

Individuals and families need a way to safely and simply track, monitor and share important financial and legal informaiton and documents in a single, secure place to reduce the risk of loss. The good news is that Legacy Tracker was designed to do just that and a lot more. Learn more! Take a view of our 2 minute explainer video noted at the top of the page.

 

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