Funds from Dormant Accounts for Charity

Mr Laurence Lien asked the Prime Minister whether the Ministry will consider introducing a law to transfer funds from dormant accounts in financial institutions to a fund that can be used for charitable and community projects.

Madam, I am taking this question on behalf of the Deputy Prime Minister and Minister in-charge of the MAS.

Madam, account holders are the rightful owners of their funds even when their accounts are considered dormant. They should be able to fully recover their funds once they are properly identified.

There is no common definition of when an account is considered dormant and there is usually no time limit for filing a claim on the funds in such an account. If a financial institution has ceased operations in Singapore, it would set up trust accounts with other financial institutions to hold funds from its dormant accounts for possible claimants.

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MAS is working with financial institutions on ways to trace and encourage holders of dormant accounts to come forward and claim their funds. MAS will also review the need for a policy on managing dormant accounts and unclaimed funds, taking into account practices in other jurisdictions.

Madam, I would like to thank the Minister for his reply. I would like to just point out an example in the UK, where in 2008, they introduced the Dormant Bank and Building Society Act which gives the government the right to collect and distribute unclaimed money from dormant accounts after 15 years for the benefit of the community while protecting the rights of customers to reclaim the money by setting aside a pot of funds in case these account holders come forward to claim their money back. They have implemented this over the last six years to great success, releasing a lot of funds, more than £600 million, to the Reclaim Fund Limited, which funds charitable causes and is still able to fulfil account holders who step forward after 15 years to claim back their monies. So, would the Government consider a similar legislation for Singapore?

Madam, as I have said, MAS will review the policy of managing dormant accounts and unclaimed funds and we will look at the experiences of other jurisdictions, including the one in the UK.

I would acknowledge that there are dormant account laws and these are quite common in developed jurisdictions. Not everyone has it. For example, Germany does not have it; Hong Kong does not have and neither do we. But there are jurisdictions with dormant account laws and, typically, these dormant account laws, the focus is on protecting the owners of the fund and removing the burden from the financial institutions in managing these funds.

The dormant accounts are usually untouched for several years – 10, 15 years or more. In many instances where they have these laws, when the funds are unclaimed, they are, in fact, transferred to the national treasury. The UK is an exception where they allow some funds, not everything, to be transferred over to a spending account which are then used to provide funding for some charities.

We will have to study these experiences, how it has been in the UK, what are the experiences in other countries as we think about reviewing our policy on managing dormant accounts.

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