Participant's Death While Plan is Terminating

[401 Chaos]

Would welcome any thoughts on the following scenario:

Sponsor of small profit Sharing plan adopted resolutions 4 months ago terminating the plan and directing that all plan accounts be distributed.

Key employee of plan sponsor died about 2 months ago while still working with recordkeeper to pull together notice and distribution elections to plan participants so the recordkeeper could process distributions per the plan's termination. Recordkeeper is now sending out the distribution notices / elections and working to distribute all assets and wind up the trust. The deceased participant had a valid beneficiary designation form for the plan on file at the time of his death naming his daughter as the sole beneficiary.

Can the recordkeeper just work directly with the daughter as designated beneficiary on distribution of the deceased participant's account without any need to involve the deceased participant's estate. In other words, we are assuming the adoption of resolutions terminating the plan prior to the participant's death and the plan's pending distribution of assets did not vest any right to a distribution of the account in the deceased participant's estate and that distribution of the decedent's account should simply be governed by the decedent's beneficiary designation (even though distribution of the decedent's account was pending due to plan terminationat the time of death).

[Lou S.]

I see no reason why the election forms should not be sent to the valid beneficiary.

Send the form to the daughter.

[ETA Consulting LLC]

I agree with Lou. I don't see where you have any option not to enforce the daughter's rights (as death beneficiary) under the plan.

Good Luck!