timing of distribution for deceased participant

[cpc0506]

What is the regulation with regards to the timing of a distribution to a deceased participant? Participant died in 2004 and there are still assets in the plan.

Thanks for your help.

[Kevin C]

It depends. Is the beneficiary the surviving spouse?

[masteff]

Or if it's a non-spouse bene, have distributions been taken at least annually each year?

Generally speaking, it falls under 401(a)(9).

[Tom Poje]

first check document to see if it says anything, or at least vaguely mentions 1 or both of the following:

(at least this is how i am writing things up - I think I covered it)

5 year rule: Benefit must be completely distributed within 5 years of the death. IRC § 401(a)(9)(B)(ii), 1.401 § (a)(9)-3, Q&A-2 The ‘5 years’ extends to the end of the calendar year (December 31)

e.g. EE dies January 1, 2003.

5 years is January 1,2008, extended to December 31, 2008.

Does not matter who the beneficiary is.

If no beneficiary specified, and document does not contain a provision, must use this method 1.401 § (a)(9)-3, Q&A-4(a)(2)

or

Life Expectancy Rule:

Makes a difference if beneficiary is spouse!

Non-spouse: must start receiving payments by December 31 of the calendar year following the calendar year the participant died. IRC § 401(a)(9)(B)(iii), 1.401 § (a)(9)-3 Q&A3(a)

Spousal exception: 12/31 of year participant would have turned age 70 ½ (or, if later, must start receiving payments by December 31 of the calendar year following the calendar year the participant died). use spouse’s current age in year of distribution, factor for single life, re-determined each year, non spouse use life expectancy factor but subtract 1 each year IRC § 401(a)(9)(B)(iv), 1.401 § (a)(9)-3, Q&A3(b)

If beneficiary specified, and document does not contain a provision, must use this method 1.401 § (a)(9)-3, Q&A-4(a)(1)

[mbozek]

What is the regulation with regards to the timing of a distribution to a deceased participant? Participant died in 2004 and there are still assets in the plan.

Thanks for your help.

Q has the plan been able to identify a beneficiary to receive a distribution? Or is this a case of an orphan plan benefit?

[cpc0506]

The beneficiary is the spouse of the deceased participant and he also works for the company that the deceased participant worked for.

[mbozek]

The beneficiary is the spouse of the deceased participant and he also works for the company that the deceased participant worked for.

The benefits will be paid in accordance with the rules for a surviving spouse, regardless of whether the spouse is also an employee.