We have a situation with a participant distribution. The participant had terminated employment, completed his distribution packet, sent it in, we processed the distribution appropriately (lump sum distribution to participant). The participant's spouse called the other day and informed us that the participant died 2 days after submitting the paperwork. She has the check, and wants to return it to the plan, then request the distribution herself as the beneficiary. We can't seem to find anything to say that this can be or cannot be done. Our concern is that the participant was actually alive at the time the distribution was requested - he died thereafter. Wouldn't the distribution need to go to his estate and be distributed per the terms of the will? As opposed to to the plan reissuing the distribution to his designated beneficiary?

Thanks for any thoughts, cites, etc!

J

Thoughts, no cites. I think that it is the date of payment, not the date of request that is determinative. Date of payment would be his 'annuity starting date' though paid in a lump sum. He was dead when the payment was attempted. The death beneficiary should prevail over his estate. The widow's request for payment as the death beneficiary is likely a claim that ought to be processed as such under ERISA 503.

Check for any possibly pertinent plan language. If none, you may have a tricky question on your hands (at least its tricky if the beneficiaries under the will or intestate heirs are not inclined to let the spouse have the $$, but if all parties concern agree that the spouse should have the money it is a big yawn).

Absent anything in the plan document, I'd be inclined to think that anything unpaid at death goes to the beneficiary under the plan, especialy when death occured only 2 days later.