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How to find out if spouse's 403(b) is ERISA or non?


Guest pamelajo

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Guest pamelajo

Hello helpful people,

My spouse recently passed away very quickly following discovery of stage 4 metastatic melanoma. Although we were together for 15 years, we were married very recently, so I am only now learning the full extent of his various investments. In addition to being his surviving spouse, I am trustee/executor.

He has a 403(b) annuity policy that was issued through a former employer somewhere around 1983. The beneficiary designation is his ex-wife, their biological son and a stepson. Beneficiaries were listed by name only and it doesn't look like the company has any other identifying information such as relationship or social security number. In fact, they are looking to me to provide contact information. I have several questions and, so far, the company has been unable to provide me with answers.

Regarding spousal consent, they will only tell me that, "We only pay named beneficiaries." I asked if the policy is governed by ERISA and the agent didn't know. He told me that he would ask his supervisor and called me back the next day to say that she said to tell me, "We only pay named beneficiaries." He still couldn't tell me if ERISA applied, or if non-ERISA, if community property law applied. (I am in CA, but might not have been married long enough). I have asked to talk to someone who can answer my questions, but so far haven't heard back. Is there anyway that this account could be not governed by either ERISA or state law? Is there a way for me to find out? Although my husband neglected to change the beneficiary, I know he would not want his ex-wife to benefit from his death.

The second issue relates to him not using the legal names of his sons. For his biological son, I don't expect a problem (he was listed as Andy rather than Andrew). However, the stepson was listed with my husband's surname. At the time he was named as a beneficiary, my husband was in process of adopting him. Then the former wife decided to stop the adoption. So the boy's name was never changed and he has never legally used my husband's name as his own.

I welcome advice on how to deal with either/both of these issues.

Thanks,

Pam

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He has a 403(b) annuity policy that was issued through a former employer somewhere around 1983. The beneficiary designation is his ex-wife, their biological son and a stepson. Beneficiaries were listed by name only and it doesn't look like the company has any other identifying information such as relationship or social security number. In fact, they are looking to me to provide contact information. I have several questions and, so far, the company has been unable to provide me with answers.

If the 403(b) had been subject to ERISA, a 'written plan' would've been required. This has been an ERISA rule since 1974 (the year ERISA was passed). However, the actual annuity contract funding the 403(b) should have written language regarding spousal rights.

Regarding spousal consent, they will only tell me that, "We only pay named beneficiaries." I asked if the policy is governed by ERISA and the agent didn't know. He told me that he would ask his supervisor and called me back the next day to say that she said to tell me, "We only pay named beneficiaries." He still couldn't tell me if ERISA applied, or if non-ERISA, if community property law applied. (I am in CA, but might not have been married long enough). I have asked to talk to someone who can answer my questions, but so far haven't heard back. Is there anyway that this account could be not governed by either ERISA or state law? Is there a way for me to find out? Although my husband neglected to change the beneficiary, I know he would not want his ex-wife to benefit from his death.

"We only pay named beneficiaries" sounds good, but is not necessarily the correct approach. "We will follow the terms of the contract, except where the contract contains provisions that are not allowed within the Regulations" would sound more appropriate. So, actually read the contract. 403(b) accounts have always had their rules written within the contracts; even prior to the recent legislations that 403(b) plans be written. It is worth mentioning, however, that if the employer was a church, the spousal rules would not apply nor would the plan be subject to ERISA. For this purpose, I won't digress into whether the church elected ERISA.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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"We only pay named beneficiaries" sounds good, but is not necessarily the correct approach. "We will follow the terms of the contract, except where the contract contains provisions that are not allowed within the Regulations" would sound more appropriate.

Good Luck!

...my turn to "LIKE"

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You can also check the DOL's website to see if the 403(b) plan files a Form 5500. ERISA covered plans are required to file.

http://www.efast.dol.gov/portal/app/dissem...?execution=e1s1

The existence or absence of a Form 5500 in the DOL database won't necessarily give you a definite answer to the ERISA question, but it's free and fairly easy to do. The search feature on the DOL site is fairly picky. If what you enter doesn't exactly match the first part of what is in the DOL database, it won't find the filing. I would start by searching for the first two or three words in the plan name.

www.freeerisa.com has a more flexible search feature, but you'll have to sign up to do a search. It's free, but you will get advertising e-mails.

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Hello helpful people,

My spouse recently passed away very quickly following discovery of stage 4 metastatic melanoma. Although we were together for 15 years, we were married very recently, so I am only now learning the full extent of his various investments. In addition to being his surviving spouse, I am trustee/executor.

He has a 403(b) annuity policy that was issued through a former employer somewhere around 1983. The beneficiary designation is his ex-wife, their biological son and a stepson. Beneficiaries were listed by name only and it doesn't look like the company has any other identifying information such as relationship or social security number. In fact, they are looking to me to provide contact information. I have several questions and, so far, the company has been unable to provide me with answers.

Regarding spousal consent, they will only tell me that, "We only pay named beneficiaries." I asked if the policy is governed by ERISA and the agent didn't know. He told me that he would ask his supervisor and called me back the next day to say that she said to tell me, "We only pay named beneficiaries." He still couldn't tell me if ERISA applied, or if non-ERISA, if community property law applied. (I am in CA, but might not have been married long enough). I have asked to talk to someone who can answer my questions, but so far haven't heard back. Is there anyway that this account could be not governed by either ERISA or state law? Is there a way for me to find out? Although my husband neglected to change the beneficiary, I know he would not want his ex-wife to benefit from his death.

The second issue relates to him not using the legal names of his sons. For his biological son, I don't expect a problem (he was listed as Andy rather than Andrew). However, the stepson was listed with my husband's surname. At the time he was named as a beneficiary, my husband was in process of adopting him. Then the former wife decided to stop the adoption. So the boy's name was never changed and he has never legally used my husband's name as his own.

I welcome advice on how to deal with either/both of these issues.

Thanks,

Pam

Sorry for your loss. You are going to have to take a proactive stance and not let the "company" control the process because the people who you are dealing with now are drones who read from a script. Is the company the employer or an insurance company or mutual fund? You can take this stance because you are the executor of your husband's estate and have certain authority under state law to get information regarding his assets. You should consult an attorney who specializes in wills and probate matters. How you will proceed depends on whether the plan is subject to ERISA or state law. If you husband worked for a governmental entity such as a public school then state law applies. If he worked for a non profit organization the plan may be subject to ERISA which is a different law or may be subject to CA law. The plan adminstrator will know which law applies.

In order to protect yourself you need to take immediate action. I would suggest that your attorney send a letter to the provider and the employer notifying them that you are the surviving spouse of the employee and you are reqesting a claim form so that you can submit a claim for benefits. I would include a copy of the marriage certificate. Sending this letter will escalate your claim beyond the drone level to someone who will take your claim seriously, probably an attorney which is why you will need your own counsel. It will also stop any claim filed by the ex from being paid. Dont answer any of their questions.

As executor and trustee you can demand information about the account from the provider that can help you identify your ownership rights such as whether the plan is subject to ERISA.

1. If the plan is subject to ERISA the plan administrator has to review your claim and either accept you claim or reject it in writing within 90 days. If it is rejected there must be a reason based on the terms of the plan. You have the right to obtain the SPD and plan document for a nominal charge which will define who is the spouse. General rule is that surviving spouse is the automatic beneficary except in 2 situations- if spouse waives the benefits or if the plan requires that the parties be married for at least a year. Most plans omit the 1 year requirement. If you meet the requirement for a spouse then you will be paid regardless of who your husband designated as beneficiary which means you will probably get 100% of his benefits. (There are complicated rules for cetain types of plans that may limit you to 50% of his benefit.)

2. If your plan is not subject to ERISA then CA law governs which is another reason you need an attorney. I dont think CA revokes the retirement beneficary designation of a spouse after divorce but you need to confirm this. In any event as the surviving spouse in a community property state you are entitled to 50% of the community assets. Your attorney will advise you of your rights and your share of the benefits in the 403b plan.

In any event you need to speak to an attorney as the information I have provided cannot be relied on as legal advice.

Edit: One other possibility is that the ex spouse/children were designated as the beneficiaries when your husband was divorced. Information on their rights to the 403b benefits, if any, would be in the divorce decree and a document called a QDRO "Qualified domestic relations order".

mjb

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