Bipartisan SAFER Act Aims to Halt State Seizure of Inactive Investments

Investment Company Institute President Eric Pan notes that current state laws often treat long-term investors as if they have vanished simply because they do not trade. When states declare these accounts abandoned, they typically force the liquidation of holdings. This process robs investors of future market gains and can trigger significant, unforeseen tax liabilities. Recovering these funds often requires years of complex administrative hurdles.

Liccardo highlighted the case of Walter Schramm, who saw his Amazon shares liquidated by Delaware in 2008 for roughly $8,000. Had the shares remained untouched, they would have been worth approximately $100,000. With unclaimed property generating over $500 million annually for Delaware, proponents of the bill argue states are incentivized to maintain loose standards that favor state revenue over individual ownership.

The SAFER Act seeks to establish federal guardrails requiring states to verify an owner’s death and ensure no beneficiary exists before attempting to claim assets. Lawler argues that the current system essentially targets passive, long-term investors who believe their assets are secure. By mandating that states prove true abandonment rather than relying on account dormancy, the bill aims to protect the retirement savings of millions of Americans.