When a check issued to a 401(k) participant or IRA saver remains uncashed for an extended time, or we cannot reach an account holder to send them funds that legally must be distributed, Guideline will attempt to contact the account holder and plan sponsor (when applicable) to verify that we have the correct personal and distribution information.
Despite these attempts, there are still times when we are unable to issue a check or when an issued check remains uncashed for more than 180 days. In these instances, Guideline will move the funds to a secure third-party provider called PenChecks.¹
PenChecks is a vendor that specializes in assisting retirement providers with distributing the assets that belong to unresponsive or missing participants and account holders.
What scenarios can lead to unclaimed funds?
One of the most common reasons for uncashed checks or unclaimed funds is inaccurate or missing personal information. Guideline uses the contact details we have on file to email important notices or send requested funds.
It’s important that participants and IRA savers keep their contact information up to date, even if they are no longer contributing to the account.
Uncashed checks
Participants or IRA savers who receive a check from Guideline, should cash the check as soon as possible.
If an expected check doesn’t arrive or it is received but has incorrect information that prevents it from being cashed, we can reissue the check.
401(k) plan terminations
If an employer is terminating a 401(k) plan, all assets must be distributed from the plan. However, some participants may not respond to requests to distribute their balances in a timely manner. Additionally, there may be some past employees whose contact information is outdated or unavailable.
Employers should make their best efforts to ensure current and dismissed employee information remains up to date in the Roster, even during the termination process.
What happens to funds after they are transferred from Guideline?
Once the funds are moved, PenChecks will automatically establish an IRA or Taxable Savings Account (depending upon the source of funds) for the unclaimed amount.²
Any distribution requests that occur after the transfer, must be completed directly with PenChecks. You can learn more about PenChecks and the distribution process on their website.
¹ Guideline has an arrangement with PenChecks to establish connectivity to facilitate PenCheck’s delivery of the services. Under this arrangement, Guideline provides administrative services to PenChecks, and, in exchange, receives certain fees, which are described in an updated 408(b)(2) Fee Disclosure available in your Resource Library.
² Balances moved to PenCheck may incur fees. For more information about PenChecks, please consult their Statement of Services and Fees.