Unclaimed Property

I am writing to inform you about Pennsylvania’s Disposition of Abandoned and Unclaimed Property Act (DAUPA) and, in particular, how it applies to municipal bonds.   According to the DAUPA, unclaimed property is any financial asset that has been dormant, meaning no contact has been made with the owner after a given period of time, usually five years.  At the close of the dormancy period, a holder of unclaimed property must file an unclaimed property report with the Pennsylvania Treasury Department.

Municipal bonds become reportable as unclaimed property five years after the call date or five years after maturity (whichever comes first) if the owner fails to cash in the bond.  The five-year dormancy period also applies to coupons and uncashed interest payments.  In most cases, the paying agent will include unredeemed bonds and bond proceeds on its unclaimed property report submitted to Treasury.  However, in some cases, the bond documentation requires that the trustee return the unredeemed bonds to the municipality or issuer before the dormancy period expires. When this happens, it becomes the responsibility of the municipality or issuer to report the funds as unclaimed property.

I hope that this information will be helpful to you and your clients in preparing your annual unclaimed property reports.  More information, including instructions on preparing a report and a link to electronic reporting software, can be found on Treasury’s website at www.patreasury.org/upforms.htm or by calling the Bureau of Unclaimed Property at 1-800-379-3999.  Thank you.

Mary Beth Stringent

Director

Pennsylvania Treasury Department

Bureau of Unclaimed Property