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Does a Plan Administrator Need to Know Whether a Beneficiary Is an 'Eligible' Designated Beneficiary?
BenefitsLink Message Boards Link to more items from this source
Nov. 11, 2021

"SECURE's revision of Code section 401(a)(9) distinguishes between an eligible designated beneficiary (a beneficiary who is: the decedent's spouse, disabled, a chronically ill individual, no more than ten years younger than the decedent, or the participant's child 'who has not reached majority') and a designated beneficiary who is not so classified.

Imagine a section 401(a) plan provides that every kind of distribution is paid only as a single sum. And that a retirement distribution or death distribution is paid only as a single sum of the entire account. Assume the plan's governing document does not otherwise require a beneficiary to take a distribution any sooner than is necessary to meet Section 401(a)(9) to tax-qualify.

With those provisions, is there any plan administration purpose for which the plan's administrator needs to know whether a beneficiary is an eligible designated beneficiary? Or must either kind of designated beneficiary get the death distribution by the end of the tenth calendar year that follows the year of the participant's death?"

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