Peter Gulia

Vanguard’s programmed click-on “To the person I am married to at the time of my death” might help an IRA holder guard against one’s forgetting to change a beneficiary designation. It’s astonishing that Vanguard Fiduciary Trust Company seems willing to accept the burden of receiving and evaluating evidence about whether an IRA holder was married and to whom she was married.

I'm not looking for details, only an anecdotal and general sense of others' experiences.

Many plans include a provision for segregating the beneficiaries' portions into separate accounts, and then applying the plan's distribution provisions, including minimum-distribution provision, regarding each separate account. Check whether your client's plan includes or omits those provisions.

A § 401(a)-(k) plan’s only participant dies without having begun a distribution, and before the plan, following Internal Revenue Code § 401(a)(9), required a distribution. Assume the plan allows a beneficiary the widest possible choices about a distribution, with no more constraint than is necessary to meet § 401(a)(9) rules. The participant had no spouse. The participant’s beneficiary is not an eligible designated beneficiary. The participant’s death was September 17, 2025. Assume all possibly relevant years are the calendar year. What is the latest date for the beneficiary to specify to the plan’s administrator any choices the beneficiary might make regarding the form of a distribution and when it begins? What is the latest date a plan’s administrator may wait until, absent the beneficiary’s choice, one must impose the plan’s default minimum distribution? I imagine I could sort this out by reading the tax law regulations, but I’m hoping a BenefitsLink neighbor can save me some time. Thanks.

blguest, thank you for pointing me to a Vanguard explanation that tends to confirm some of my educated-guess suspicion. It seems Vanguard permits an IRA holder (and might have permitted an “Individual 401(k)” participant) to specify a spouse beneficiary without a name, instead specifying the relationship. (Vanguard explains that such a designation might guard against some potential consequences of an IRA holder’s failure to change one’s beneficiary designation.)

Before Vanguard exited its “Individual 401(k)” business, Vanguard sent a customer a “beneficiary verification” that included this information: Beneficiary To the person I am married to at the time of my death Backup Beneficiary Benjamin Brother 50% / Roberta Relativebyaffinity 50% Here’s what I don’t know: Could the lingo “To the person I am married to at the time of my death” have resulted from Vanguard recording exactly what the participant typed in the website? Or had a participant tried to type in that phrase, would Vanguard’s system have rejected the entry because it was too many characters or because it seemed not to be a name? Did Vanguard set up that lingo as a programmed choice a user could click on? Did Vanguard set up that lingo as a plug-in for a situation in which the participant declined to name a beneficiary and Vanguard’s records about a participant showed the participant as having a spouse? In the circumstances I’m advising about, whether “To the person I am married to at the time of my death” resulted from the participant’s considered writing (which might be plausible because the participant had filed a divorce petition, and was lawyer-advised), or partly or wholly because of something Vanguard set up might matter in how the retirement plan’s administrator interprets the participant’s “backup” or contingent beneficiary designation. BenefitsLink neighbors, thank you for your gracious help.

An employer has a § 403(b) plan, elective deferrals only, with only TIAA-CREF. The employer is considering a different provider for ongoing § 403(b) elective deferrals. The employer assumes it lacks power to remove assets from TIAA-CREF. Even if it might have some such power, the employer would be reluctant to interfere with an individual’s choice to continue with TIAA or CREF for previously accumulated assets. If it matters, this governmental plan cannot be ERISA-governed, no matter what provisions or restrictions the employer might set. If an individual considers rollovers, if 59½, or § 403(b) transfers from TIAA or CREF to the new provider: What exit expenses will that bear? Is there a lock-up on all or some of the TIAA credited-interest contracts? What else should an adviser to this employer or its participants tell them to worry about?

A fiduciary might consider whether to delete or display terms not used in any of the plan's communications and also not used in any of any designated investment alternative's communications. I can imagine reasoning in either direction.

If the MEP also is a PEP, consider that a pooled-employer plan must “designate a named fiduciary (other than an employer in the plan) to be responsible for collecting contributions to the plan[,] and [must] require such fiduciary to implement written contribution[-]collection procedures that are reasonable, diligent, and systematic[.]” ERISA § 3(43)(B)(ii). Even without that statutory command, a non-PEP multiple-employer plan might have a fiduciary other than the participating employer responsible to collect contributions. The participating employer might ask the plan’s administrator or, if distinct, a contribution-collection fiduciary about that person’s procedure for collecting a past-due contribution and adjusting individual accounts to make good the elective deferral and an investment-opportunity loss.

Is this plan ERISA-governed? For example, if all participants are self-employed individuals (and the plan never covered an employee), the plan might not be ERISA-governed. And whether ERISA or a State’s law governs the plan, consider how remedies might differ regarding a partner. When a participant who is an employee has an amount intended as an elective deferral taken from her otherwise due wages and the amount is not promptly contributed to the plan’s trust, the participant might be due a plan investment adjustment. But an amount not contributed as a partner’s elective deferral might not have been segregated from the partner’s income or capital interests under the partnership agreement. That might affect related measures partnership values, plan investment values, and interacting opportunity losses and gains. Yet, consider also full correction of nonexempt prohibited transactions. If there is a correction for the retirement plan, the plan’s administrator might want its TPA’s help in coordinating with the employer’s accounting for partners’ income interests and capital interests. This is not advice to anyone.

A fiduciary assembling an ERISA rule 404a-5 disclosure to participants and other investment-directing persons plans to use a “Sample Glossary Of Investment-Related Terms For Disclosures To Retirement Plan Participants” collected by The SPARK Institute, Inc. and other trade associations and related charities. The document the fiduciary has is labeled “Version 1.01 April 26, 2012”. A visit to https://www.sparkinstitute.org/resources/best-practices-industry-standards/ shows that 2012 version. But is that first version still the current version? If not, what is the current version? BenefitsLink neighbors, thank you for your gracious help.

Recognizing some ambiguities of ERISA § 104(b)(3) or of 29 C.F.R. § 2520.104b-10, I’m curious: What conventions do designers of software for administering health plans use to set whether a former participant, a former beneficiary, a former alternate recipient, or a former continuee routinely receives a summary annual report on the plan-accounting year in which one was not former?

DSG, for an analysis of some (not all) of the issues, read or re-read In re Marriage of Janet D. & Gene T. Shelstead, 66 Cal. App. 4th 893, 78 Cal. Rptr. 2d 365, 22 Empl. Benefits Cas. (BL) 1906 (Cal. Super. Ct. 1998). Interpreting ERISA § 206(d)(3) and applying § 206(d)(3)(K), the court reasoned that an order can be a QDRO only if it restricts its alternate payee—including a successor-in-interest to an original alternate payee—to a spouse, former spouse, child, or other dependent of the participant. While a California court’s opinion sets no precedent for any Federal court, some judges might adopt or adapt Shelstead’s reasoning. Some plans’ administrators might follow Shelstead’s, or even harsher, reasoning regarding a would-be alternate payee who died before the order one hopes is a QDRO is made. For an order directed to an individual-account (defined-contribution) retirement plan, a plan’s administrator might be less likely to deny QDRO treatment if the order, instead of providing for a payment to some named person other than the decedent, provides that a separate interest not paid or distributed before the alternate payee’s death is distributable to the alternate payee’s estate. This is not advice to anyone.

The Treasury rule sets no definition for the phrase “primary residence”. So, unless the plan’s governing documents define the phrase, an administrator must form its interpretation, doing so with exclusive-purpose loyalty and no less prudence—including care, skill, and diligence--than ERISA § 404(a)(1) requires. Even if one reasons that an interpretation logically consistent with Federal laws generally, or with Federal tax laws particularly, should be preferable, that reasoning might yield no obvious conclusion. The United States Code generally, and the Internal Revenue Code particularly, each has many uses of the phrase “primary residence”. And all those are for a purpose different than deciding whether a retirement plan should allow a participant to invade one’s savings before severance-from-employment. If one interprets the § 401(k)-1 rule’s use of “primary residence” to refer to a common-law meaning, a leading dictionary defines both primary residence and principal residence as “[t]he place where a person lives most of the time.” Residence, primary residence, principal residence, Black’s Law Dictionary 1568 (12th ed. 2024). But that one-phrase construct does not say what measure of time to look to. Is it the most recent year? The most recent five years? Ten years? One generation? A whole adult lifetime? Or the time since the most recent establishment of domicile? A plan’s administrator might form the best interpretation it can while not incurring an unreasonable expense. This is not advice to anyone.

If the plan’s administrator denies the hardship claim, follow ERISA § 503 and the plan administrator’s claims procedure. That includes giving a denied claimant an opportunity to present evidence and legal argument to support one’s claim. That might include showing facts and explaining reasoning about which place is the participant’s primary residence. If hardship claims are on a § 401(k)(14)(C) self-certifying method, does the plan’s administrator have actual knowledge that the participant’s certification is false?