SSA and Deceased Participants

[DTH]

I have a deceased participant who participated in a DC plan, who did not designate a beneficiary and has an account balance as of the end of the plan year. Do I need to report the deceased participant on Form 5500 Schedule SSA?

Logically, it doesn't make sense to report him since the deceased participant would not receive the Social Security Administration notification letter, but death is not an exception in the instructions.

I assume that normally it would be the beneficiary of the account that would go on the SSA.

Thanks!

[david rigby]

Not sure of the exact answer, but if you distribute the acount balance (to beneficiary, estate, etc.) by the time of filing the 5500, then you can omit from the Schedule SSA. Also, note that you do not have to include on the SSA until the filing of the 5500 for the plan year following the year of separation of employment.

[DTH]

Thanx Pax. Let's assume there is still have an account balance at the end of the 2nd year and no beneficiary has come forward.

[david rigby]

Don't forget to use the plan provisions to determine who to pay, and when.

[JanetM]

Could you escheat to the state?

[Guest chrisoaks]

my question for this is: what about an active guy that dies with a vested benefit. his spouse his entitled to a deferred vested benefit at his age 65. does this surviving spouse have to be reported on an ssa?

[david rigby]

yes.

If the employee was previously reported on SSA (due to VT status), advisable to remove him/her on the SSA, as well as adding the surviving spouse.

[Kirk Maldonado]

JanetM:

There is a serious issue as to whether or not state escheat laws are preempted.

[mwyatt]

In general, I would venture that it is imperative that you monitor your past SSA submissions. You don't know what fun is until you have to prove to some former participant that received this nice letter from Social Security that they in fact did get paid their account balance 16 years ago, but for some reason your client didn't choose to keep around bank statements for that length of time (especially entertaining when the bank holding the checking account at the time has been through at least 10 different takeovers...)