deceased participant

Submitted by Richard Stumpf on Mon, 2016-07-18 19:49

I have a 401k plan. last year one of our participants cleaned out her account when she was diagnosed with terminal cancer. She died. After her death, our company make a profit sharing contribution, part of which went to her. She’s dead, and she has no known relatives or next of kid. I want her small balance out of my plan. Do I notify the state that I have unclaimed property, or do I have to make an effort to locate a beneficiary on my own?

Thanks.



Submitted by Alan - IRA critic on Mon, 2016-07-18 22:55

I don’t know. If you do not have a plan administrator that can help, you might try calling EBSA’s regional office for your location:   https://www.dol.gov/ebsa/AboutEBSA/org_chart.html#section13



Submitted by Jose Morales on Tue, 2016-07-19 16:08

If she died without next of kin or any known relatives then there could possibly have been a public administrator assigned to handle her estate.  You should be able to check with the county in which she lived if there was one named.



Submitted by Ben Meyer on Wed, 2016-07-20 15:30

  • The US Department of Labor has guidelines for what a plan needs to do to find missing participants or beneficiaries.  (https://www.dol.gov/ebsa/regs/fab2014-1.html)  The posting covers terminated plans but would also apply for finding plan beneficiaries after separation.  It includes things like sending a certified letter to “The Estate of xxx” at the last known address, look in the original employment application for someone to be notified in case of emergency, and similar.  Looking for a probate case is also a good idea, as posted earlier.  All of these are in the furtherance of performing the fiduciary duties of the plan.  Also, the abandoned property office of your state and the employees state of residence (if different) can inform you of what notices should be sent before sending the funds to the state under escheat.  However, the funds would need to stay in the plan for a number of years before sending to escheat as abandoned property.  A relative might come forward during that time to claim the funds.
  • The 401(k) plan probably has a provision that small balances under a certain amount, usually between $1,000 and $5,000, will be transferred to an IRA account for a separated employee.  This would also relieve the 401(k) plan of any further responsibility.

 



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