Reporting by John C. Zaragoza, Your Turn/Ventura County Star
California is sitting on $15 billion that belongs to its people. Much of it is owed to retirees, like me, who saved carefully for decades, only to learn the state controller in Sacramento can arbitrarily seize their savings or investments as unclaimed property just because an account went untouched too long.
This happens through California’s unclaimed property program, which collects assets businesses report as dormant or undeliverable, including uncashed checks, insurance payouts, securities, safe deposit boxes, and old savings accounts.
When a business believes it has lost contact with the owner, it turns the property over to the State Controller’s Office in Sacramento, which is supposed to safeguard it until the owner claims it. Countless people could be found and repaid, but have no idea the state has their money.
Some states proactively return your lost money, but ours prefers to play hide-and-seek. Between jury summonses, DMV renewals, and tax bills, the state clearly has no trouble finding me when I owe them, but suddenly forgets my address when the tables are turned. Funny how that works.
Unfortunately, unclaimed property is now one of California’s top revenue sources. As the fourth-largest economy in the world, California has no shortage of ways to raise revenue, yet Sacramento claims roughly a billion dollars a year from assets it’s supposed to be holding for someone else. This money belongs to individual savers and shouldn’t be padding the state budget.
The definitions the state uses to seize property make this possible. An investment account can be declared abandoned after just three years of inactivity, even with a current address on file. Take it from someone who spent a career building a retirement account: three years is a flash.
It might mean changing jobs, moving, helping care for aging parents, welcoming grandchildren, or simply getting busy with life. It’s a season where life gets crowded and you are intentionally abiding by the “buy and hold” advice we’re all given, but that time period is all it takes for California to declare the account abandoned.
Under California’s rules, my investments could be turned over to the state without me ever realizing it happened. And even if I eventually get the money back, I don’t get back the years of growth I missed. The dividends, investment gains, and compounding that were supposed to help fund my retirement are simply gone.
How to ensure your savings don’t become ‘unclaimed property’
There is a state database where you can search whether this has happened to you, and it’s worth searching for a spouse’s name too. One in three people who check find lost money in their name.
These laws are in desperate need of reform. At the federal level, the bipartisan Safeguarding Americans’ Fairly Earned Retirement (SAFER) Act, introduced by Rep. Sam Liccardo (CA-16), would ensure investment accounts remain with their owners during their lifetime instead of being transferred to the state based solely on a lack of account activity.
On the state level, Sacramento should treat unclaimed property as an obligation rather than a revenue stream. AB 2031, introduced by Assemblymember Cottie Petrie-Norris (AD 73), would make sure Californians don’t lose their investment accounts simply because they haven’t recently interacted with them.
I didn’t spend decades saving and investing just to hand control over to the state government. That money isn’t Sacramento’s to hold onto. It’s ours to pass along to our kids and grandkids, support local charities, and spend in our communities.
Every day lawmakers wait, more accounts cross that three-year mark and more retirees lose out on the growth they earned. Lawmakers need to pass AB 2031 now, before another Californian loses years of compounding returns to the state’s coffers.
John C. Zaragoza is the former mayor of Oxnard and a former Ventura County Supervisor.
This article originally appeared on Ventura County Star.
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