TPA lost (?) Beneficiary Designation, (Deceased Participant)

[TCWalker]

New beneficiary designations were rejected by a TPA as missing critical information, family law attorney sends the third corrected that OK. But, no confirmation was given that it was received.

Participant dies, of course, now TPA says they never received the third and final corrected copy. Attorney didn't send by registered mail, just has the 3rd copy in her files.

New beneficiary wants to avoid court battle. Anyone dealt with similar facts, have cites or white paper on the issue to suggest? Thanks.

[maverick]

No court cases to cite, but I have a general comment.

Situations like this are the reason I (tpa) do not maintain beneficiary designation forms. Things change so often and who knows if you have the most current document on file. The client is advised to keep the forms in employee personnel files. When someone passes away I ask the client for the form.

I'd be interested in hearing why tpas should keep benef forms.

[jsb]

A couple of reasons that come to mind:

I have over 13,000 employees with 10,000+ participants. Annual turn-over is around 10%. When the employee quits, they may leave their money in the plan for many years. I don't want to track a beneficiary form in a personnel file (or anywhere else, for that matter) for the next umpteen years.

I pay my recordkeeper to keep the records...all of them. The value of that service is diminished by what I must do myself.

[mbozek]

Keeping records of bene designation is a fiduciary duty of plan administrator even if delegated to a recordkeeper. Plan admin will become party to lawsuit over missing or out of date beneficary designation. Best way to avoid problems (e.g., failure to remove ex-spouse as bene) is to include a statement of who is bene along with the annual statement of the account balance and note the default bene provisions under the plan.

In the present case plan admin should have discretion under plan provisions for paying benefit claims to accept 3rd revision if accompanied by affidavit from atty stating that it was sent to TPA. If another person objects, the PA can file an interpleader acton in fed ct where the contesting parties can dispute the PA decision. The other alternative is to get the disputing parties to settle the claims by written agreement and waive any rights against the plan before benefits are paid.