Mutual Funds and Abandoned Property

It is important to understand the escheatment process because it may impact your assets.

What Is Escheatment?
All states have laws governing the disposition of abandoned property. Escheatment is the process of turning over to a state property that is considered abandoned or unclaimed under state law. Financial institutions, including brokerage firms, banks, and mutual funds, are required to report personal property that has been abandoned and then turn that property over to the state. When certain retirement accounts are turned over to the state as unclaimed property, the IRS considers this a taxable distribution subject to tax withholding and reporting.

Your mutual fund account may be considered abandoned if certain criteria are met, such as mail to your residence being returned as undeliverable or, in some circumstances, a lack of account activity for an extended period of time. Once a mutual fund account has been identified as meeting the requirements for abandoned property, it must be turned over to the state in a process known as escheatment. Generally, abandoned property must be turned over to the state of the shareholder's last known residence. It is important to note that once the funds are escheated to the state, the account owner may work with his/her state's division of unclaimed property to reclaim those assets; see below for more information.

I received a letter saying my MFS Account may be considered abandoned property. What should I do?
Before MFS turns any assets over to a state, we will make a diligent effort to locate and make contact with the account owner. We have partnered with outside companies to assist with outreach letters to our shareholders about accounts that may be considered abandoned. These companies have designated websites that allow the shareholder to easily respond and prevent the account from being considered abandoned. If you receive such a letter, please respond through their website and provide the control numbers, as directed in the letter. Please note that these firms are not trying to sell you anything. They are merely trying to make contact with you, and this contact will then be recorded in MFS's records. For security purposes, when responding by web, you will need to provide the last four digits of the primary account owner's social security number.

How Can I Prevent My Mutual Fund Assets from Being Turned Over to a State?
The best way to ensure that your MFS Mutual Fund accounts are not deemed lost or abandoned is by contacting us once a year.  This can be accomplished through one of several different means:

  • Log into your account at MFS Access and view your account holdings. Please note, simply visiting mfs.com without logging in will not keep your account active.
  • Call 1-800-MFS-TALK and check your account balance using your Personal Identification Number (PIN). Please note, you will need your account number to establish a PIN if you have not already established one.
  • Call one of MFS's customer service representatives at 800-225-2606 any business day. Simply tell the customer service representative that you would like to check the balance on your account, and the representative will walk you through this process.
  • Notify us promptly of any change in name or address.
  • Cash all dividend and redemption checks you receive.
  • If you receive a notice from one of our business partners attempting to re-establish contact with you, follow the directions in the letter so we may capture your response.

What Happens Once an Account Is Identified as Abandoned?
Once an account meets the state's abandoned property requirements, a diligent effort will be made to locate the account owner to avoid the escheatment process. If we are unable to locate the account owner, the state claims the account through the escheatment process, whereby the state becomes the owner of the account assets. Once the assets have been turned over to the state, it is up to the account owner to contact the relevant state agency to start the process of reclaiming the assets back.

What are my options if assets are escheated?
If you believe that you have property that was escheated to the state and you want to reclaim the assets, MFS recommends visiting the website of the National Association of Unclaimed Property Administrators at http://www.naupa.org/. This website provides contact information for the unclaimed property divisions of each state, as well as other helpful information. The following link to the Securities and Exchange Commission website will also provide basic information on the escheatment process: https://www.sec.gov/answers/escheat.
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