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Posted

A defined benefit plan retiree was receiving monthly payments on a life annuity. The checks issued since January 2016 remain uncashed. The plan sponsor has now determined that the participant died in December of 2016. I think it is not a problem to stop payment on the checks issued after December 2016, but what do they do about the uncashed checks from before the date of death?

 

 

Posted

In my opinion (for what that is worth), the payments for January (interpreting the post as saying that the January 2016 payment was not cashed) through December 2016 are owed to the participant's estate.  Pretty clearly, those checks will have to be reissued.  In a perfect world, by now there would be an executor to whom checks made payable to the "estate of..." could be provided.  Whether interest should be added is a matter of plan administrative practice.

The amounts owed are not owed to a beneficiary, but to the participant/the participant's estate.  If anything was payable for periods after the death of the participant, that would be payable to the beneficiary, not the participant.

Always check with your actuary first!

Posted

The original poster might get some value by searching the Message Boards using the term "estate"

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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