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Minors as Beneficiaries in a DB Plan


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Absent plan language addressing the issue, does anyone know of state laws (Maryland) that would prohibit distributions to a minor from a DB plan?

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Guest PeterGulia

If the plan is governed by ERISA, ERISA generally preempts a state law that relates to the plan. However, ERISA does not preempt a state law that regulates banking, insurance, or securities. See ERISA 514.

While nothing in ERISA precludes a plan from providing a payment to an individual who is younger than a particular age, the plan sponsor and plan administrator may wish to consider whether such a payment would set up an effective receipt or release under the federal common law of ERISA.

Also, the plan sponsor may wish to consider whether it should define what the plan means by the concept of a "minor". The label is often misused. The age at which an individual is presumed competent to make legally enforceable obligations varies considerably both by purpose and by state or jurisdiction (to the extent that anyone thinks state law is relevant).

For a church plan, governmental plan, or other non-ERISA plan, state law may be relevant or even applicable.

What's most important is that the plan administrator consistently follow its written procedure.

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