Plan Distribution to Spouse

[Dazednconfused]

Former participant wants to take a distribution but would like the check made out to his spouse. Is this permissible? If so, I would think 1099r reporting would be under the participant of the plan and not the spouse receiving the check?

Thanks,

[pmacduff]

Benefits from a qualified plan cannot be "assigned" (which is what this would be).

Participant has to take the distribution and then I suppose could endorse the check over to the spouse or deposit and rewrite another check to the spouse.

[mbozek]

Former participant wants to take a distribution but would like the check made out to his spouse. Is this permissible? If so, I would think 1099r reporting would be under the participant of the plan and not the spouse receiving the check?

Thanks,

Any payment to the spouse would be an assignment of interest by the employee which makes the payment taxable to him. While IRS regulations allow an assignment of the payment to the spouse it does not change his income tax liability.

[My 2 cents]

It's different from an assignment under a QDRO, which would be taxable to the alternate payee and not the participant.

[pmacduff]

so mbozek, you are saying that per IRS regs a participant can direct the Plan pay the spouse directly? Can you provide the cite?

I don't believe that would be allowed in a qualified plan, even to a spouse, unless as my 2 cents indicated the payment was made pursuant to a QDRO.

[david rigby]

Assignment may be irrelevant.

Will the Plan Administrator write the spouse's name on the check? If the PA is being cautious, expect a NO response.