DC plan deceased participant with no beneficiary

[doombuggy]

Client notified us that a participant who term'd in early 2014 has since died. I don't know how the client found this out (this plan is currently in transition to me from a co-worker). Debra, dec'd ee, did not designate a beneficiary. Plan sponsor heard thru the rumor mill that she had an estranged daughter. The plan sponsor is located in FL, the participant in Nevada. She was 60% vested at the time of her termination from the company. Her current account balance, vested or not, is still under $5,000, the force out amount.

1) Can the plan sponsor roll her assets into an IRA payable to the Estate of, a possible assumption on their part?

2) Can the assets we escheated to the state of Nevada? I don't know if they pay state taxes there (we do not here in FL) and I also didn't think you could do this anymore...

3) the plan doc indicates that the order if there is no bene on file is spouse, issue, parents, estate. Is the plan sponsor required to try to find out if there really is a daughter out there? How would they do that?

4) Would her vesting change? The plan does vest 100% due to death, but she was already terminated when she died, so I am not sure if that applies. On the fence about that one.

Thanks for your thoughts!

[david rigby]

1. what does the doc say?

2. Not likely. What does the doc say?

3. Follow the doc.

4. Vesting might not change due to any event after DOT. What does the doc say?

[doombuggy]

We have gotten some updates on this problem since I initially posted it last month.

The participant was still employed at the time of her death. She had been hospitalized and the employer was told she died in the hospital. They do not have a death certificate. This answers my vesting question.

Our distribution processor has access to a search program. The participant doesn't come up listed as dec'd in the search for other relatives and we thought that was strange since she died in 2014 - or at least that is what the employer was told.

I have indicated in my initial post (#3) what the document states is the beneficiary order if no beneficiary was named. Our people search does come up with a female (and a male) relative that could correspond to children/issue.

Should we try to correspond with these two individuals to indicate that we are looking for this participant and if she is actually dec'd (employer has no death certificate) we are looking for her beneficiary?

Would the employer be able to obtain confirmation from the state or the hospital she was in that this participant actually is dead?

[Peter Gulia]

If the plan's administrator has not decided that the participant is dead and no one has submitted a claim for a death benefit, the administrator might consider that it has no current need to discern who might be a beneficiary.

Consider that reaching-out efforts often spark false claims.

If the participant's employment ended in 2014 (and the balance is low enough to call for an involuntary distribution), shouldn't a routine processing of involuntary distributions have emptied the account before 2016?

The plan's administrator should use or engage identity-control, death-information, and address-information services that are under the administrator's control, without communication to a person who seems to be the participant's relative.