jmartin Posted April 5, 2013 Posted April 5, 2013 We have participant who was convicted of murder of his spouse in 2011 and has since been in prison. Expected to be there quite a long time. He also has an account balance in his former employer's retirement plan. He expressed a desire to "get his money" to a friend who happens to be employed with the company and relayed the information to us. Based on some research, especially here, it does sound like we can send him a distribution form to complete and he can potentialy take a distribution. Doesn't sound like an IRA would be an issue, but rather a lump sum. Could he have a lump sum wired to his checking account? Seems like a check would be the issue. Can anyone verify?
david rigby Posted April 5, 2013 Posted April 5, 2013 Cannot benefit by the murder (ie, cannot get a benefit from deceased spouse's plan). If it's his plan, he probably meets the requirements for a distribution (severed employment, etc). The plan probably has to treat him like any other former employee, including providing tax notice, rollover opportunity, etc. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
jmartin Posted April 5, 2013 Author Posted April 5, 2013 To clarify, I am referring to his balance in his own retirement plan. Thanks for the response.
Lou S. Posted April 5, 2013 Posted April 5, 2013 Morbid but I don't see anything prohibiting a distribution to him. Unless maybe you've been served with notice of a cival suit from the deceased spouse's family. I don't see an issue with direct deposit, assuming he has an account to send the funds to. I would be leary of sending to the friend's bank account.
Guest Kevin1 Posted August 5, 2013 Posted August 5, 2013 Just saw this. We had this and the justice system got mixed up in it when paperwork was sent to him. The money was put in a trust account for him at the prison. (Pelican Bay-he wasn't a nice person).
MoJo Posted August 5, 2013 Posted August 5, 2013 I had this happen many years ago and it's a sticky situation - only because of the interplay of ERISA and state law. The state where I had it happen (Ohio) would not allow a prisoner to receive funds except through the Warden of the prison, some of which would be used to offset costs of incarceration, and/or to make restitution for their crime. That of course could be problematic under ERISA. I would make sure the Warden/other officials are aware, and if they choose to intervene, perhaps an "interpleader" action would be appropriate, where the trustee asks a court to make a determination as to whom the funds should be paid.
Everett Moreland Posted August 5, 2013 Posted August 5, 2013 See DaimlerChrysler Corp. v Cox, 6th Circuit, 5/23/06
david rigby Posted August 5, 2013 Posted August 5, 2013 http://fuguerre.wordpress.com/2006/05/23/involuntary-transfer-of-prisoners-pension-benefits-violates-anti-alienation-rules/ I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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