Florida’s Unclaimed Funds are at an all-time high and they are the reason why Florida needs a new money manager, according to a new report.
The state is currently the largest unclaimed fund in the country and has seen more than $8 billion in cash leave the state.
The Unclaimed funds are often held by small businesses and retirees and are considered a source of wealth for Florida.
As a result, the state is one of the few states where a financial adviser can claim the funds without any paperwork.
A new report from a non-profit group says the unclaimed money is a critical asset for Florida, and it’s time for Florida to get rid of it.
The report, titled “Unclaimed Funds: An Investment Strategy for Florida,” was released Wednesday by the Florida Unclaimed Fund Association.
It’s the latest report to come out about the unsecured cash that is held by businesses and retirement funds.
“These funds provide investors with an easy way to protect their investment while providing a secure and reliable source of income for businesses and small businesses,” said David Haddad, the executive director of the Florida Alliance for a New Economy.
The funds can be held in a brokerage account, or invested in a bond or mutual fund.
“The Unclaimed Money is an investment that is secure, reliable, and a great investment for small business owners and retirement accounts,” Haddads said.
The Florida Unscrutiny and Audit Board is tasked with looking into the state’s unclaimed accounts and the process by which companies can get access to them.
“Unscruts, as the name suggests, is a process of inspecting and auditing the records of a company or institution,” said the report.
“As a result of these inspections, the Unscratings Authority can issue a report to the Board, which is a required part of the process.
In the Unclaimed Account, the Board has the authority to issue reports on behalf of the State of Florida.”
Haddadas report says the unfunded liability of Unclaimed accounts is staggering and can be traced to two things.
One is that businesses in Florida are not doing their due diligence when they decide to set up a deposit account.
The other is that companies are using their deposits as a source to fund a company’s own debt and that’s an unsustainable strategy.
The states Unclaimed Accounts Act of 1977 states, “All funds in the State, and the funds of the Federal Government, and all interest on the State’s bonds and notes, shall be held as the sole and exclusive property of the United States Government and shall not be sold, loaned, or otherwise transferred to any person.”
The report states that, because of these two things, businesses are often unwilling to deposit their own money into these funds.
The unclaimed cash can then be transferred to creditors or to an investor who wants to invest in them.
The Financial Accountability Oversight Board (FAAB), a federal agency, was created by Congress to oversee these funds and has been doing a great job.
The agency has the power to approve or deny a company applying for an Unclaimed account.
It can also initiate investigations into whether companies are in compliance with the laws and regulations that govern the funds.
Florida has about $8.5 billion in Unclaimed money that is not being used to pay off debts or invest in assets.
The most recent numbers are from 2016.
“Our unfunding liabilities are in excess of $20 billion,” said Haddias report.
With more than one-third of the state unclaimed, the report says it’s imperative for the state to get serious about getting rid of the funds as quickly as possible.
The money is so volatile that it could cause a serious financial meltdown if it’s left unclaimed.
“Fees, penalties, and interest will be imposed upon companies that do not pay their debts,” the report said.
“This includes not only fines but also interest.”
It’s unclear how much money the state will be required to spend on its Unclaimed fund.
Haddys report says there is a backlog of about $4.4 billion in unfundable liabilities, including $3.8 billion that is unclaimed in the unaccredited state of Florida.