Employer Contribution as a Death Benefit?

[Randy Watson]

An employer had what they thought was a non-ERISA 403(b) arrangement where they made employer contributions to individual 403(b) annuities on behalf of each employee. There is no plan document and no contract or agreement between the employer and the various 403(b) providers. This was really operated like a non-ERISA salary deferral 403(b) (other than the fact that they made employer contributions).

So an employee passed away and the annuity was paid out to the beneficiary. The employer attempted to make its contribution, but was too late as the annuity contract was paid out. The insurer will not provide the employer with the beneficiary information so now the employer has this money ear marked for the employee, but has its hands tied. Since there is no plan document there are no plan provisions that require the employer to make the contribution. I don't see anything wrong with simply paying the amount ear marked for the contribution out to to the employee's spouse. Any thoughts?

[Guest Tom:]

Contributions canot be made on behalf a deceased former participant.