Who is a Participant’s Beneficiary if the Original Beneficiary has Died?

Q: When a beneficiary to an ERISA 403(b) account passes away without taking any action with regard to the account, who is the beneficiary upon the original beneficiary’s death?

Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

A: Fortunately, there are many compliance questions that may be answered by language contained in the plan document for the plan, and this question is an example of such a situation.

In some cases, the plan document will have language that addresses this specific issue, such as the following:

“If a beneficiary survives the participant but dies before distribution, the benefit is paid to the beneficiary’s designated beneficiary—or, if none, to the beneficiary’s estate.”

If a plan contains language similar to the above, the beneficiary would be the original beneficiary’s estate.

If there is no language, or the language in your plan document is unclear, outside ERISA counsel should be consulted.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

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