Designation of Beneficiary

[Lori H]

A participant in a 401(k) plan has requested to change his beneficiary to his new spouse. Currently his former spouse is the beneficiary. Does the plan administrator need any type of documentation that the divorce decree did not grant the former spouse a portion of his 401(k) that would be payable at his death? If so, what type of documentation would be needed (copy of divorce decree, letter from the participant)?

Thank you.

[QDROphile]

No.

[david rigby]

This raises the purely administrative question: what documentation does the plan sponsor require at the time a participant and/or beneficiary applies for a benefit?

eg, in the case of a benefit paid to a surviving spouse, a marriage license?

[My 2 cents]

Wouldn't think that any documentation would be needed with respect to any rights of the prior spouse that would have been preserved. The onus would be on the prior spouse to make sure that the plan administrator is notified. Certainly, if appropriate evidence is provided to indicate that the spouse has changed, that ought to be enough, especially if no distributable event has taken place.

It is even possible that there has been no action to preserve the ex-spouse's rights but that such an action could take place before the benefits are paid out.

Absent notice to the plan administrator that there has been a DRO with respect to the ex-spouse, it would appear that the plan administrator should have no duty to the ex-spouse. No plan administrator should have to initiate an inquiry.

[GMK]

Don't think that's Mr. Rigby's question, 2 cents. In practice, how do plan administrators know/verify that this person who presented them with a distribution request form is actually the deceased participant's surviving spouse? or do you just take their word for it?

[My 2 cents]

Proof of divorce, maybe. Proof of marriage, probably. Proof that divorce decree did not grant pension rights to ex-spouse, no.

In changing the beneficiary, probably should be enough to receive a written assertion from the participant that Spouse #2 is his or her spouse and should be put down as the beneficiary. Look a little more carefully if the participant retires (especially if there would be issues with the alleged spouse being a joint annuitant under the plan if not really a spouse) or dies.

In practice, what does the plan require for proof that the claimant is the deceased's surviving spouse in the absence of there having been a previous spouse? Unless the ex-spouse has spoken up in some fashion, it should be acceptable to presume that the ex-spouse has no rights under the plan.