We began paying a joint and 50% survivor annuity to a participant from our defined benefit plan several months ago. The distribution election was made by the participant’s court-approved guardian, due to the participant’s apparent mental issues. However, we have now been informed that the guardianship is being terminated by the court. There is some dispute as to whether the guardianship was necessary or appropriate in the first place, but at this point the court has simply terminated it going forward and states that the participant is capable of managing her own affairs.
As a result of the (perhaps inappropriate and unnecessary) guardianship, the participant did not have the opportunity to choose the form of benefit she might have preferred, but is instead stuck with the benefit form chosen by the guardian. I am having difficulty finding any authority for allowing the participant to make a different election now. The situation doesn't fit any of the usual exceptions for modifying an annuity payout. Has anyone encountered a situation like this before and, if so, are you aware of any authority for a new election now? Or has anyone obtained IRS approval of an exception in similar circumstances?
Thanks much!
