Distribution to Beneficiary

[Guest notapensiongeek]

We have a deceased participant in a 401(k) plan whose spouse is the primary beneficiary. The participant's account balance is approximately $500.00. The spouse refuses to sign the distribution election form from the investment provider (Great-West), so the investment provider will not distribute the funds until the form is signed by the beneficiary (per their legal department).

This has been an ongoing issue for almost five years.

Any suggestions on how to get the money out of the account, or is it even possible without the spouse's signature? Or do we have to wait until the plan terminates until a force-out will occur? Any other issues we need to look at here?

Any input would be greatly appreciated. Thanks!

[david rigby]

Is this different from a terminated vested participant who chooses to leave his/her account balance invested in the Plan? If the balance exceeds $5K, isn't it the participant/beneficiary who gets to decide when to take it?

In other words, "What does the plan say?"

[Guest mjb]

Under IRS reg 1.411(a)-(11)©(5)-spousal consent is not required in order to pay a death distribution. Only reason for spousal consent is if plan requires it.

[Belgarath]

Except that if it is a QPSA benefit, then under 1.417(e)-1©, the spouse cannot be forced to receive the QPSA before the participant would have reached NRD, or age 62 if later. But the plan will state this if applicble.

[Guest mjb]

B-even in the unlikely event that a 401k plan provides for an annuity benefit, if the value of the benefit is less than $5,000 no spousal consent is needed. reg. 1.417(e)-1(b)(2)(i).

[Belgarath]

I Absolutely agree. I threw in my observation in case someone was looking at Pax's question as to status if $5,000 exceeded.