Who Retains The Beneficiary Forms? | Watkins Ross

Beneficiary designation forms are used to determine who is entitled to the defined contribution retirement plan benefits upon the death of a participant. While participants complete these forms upon entering a plan, it’s often overlooked if the participant has a change in status through marriage, divorce, etc.

Maintaining updated beneficiary forms is crucial to maintaining your qualified retirement plan. So, the question becomes, who is responsible to retain the beneficiary forms?

The Plan Administrator/Sponsor is typically responsible for retaining the beneficiary designation forms; however, many may not realize it is their responsibility when the participants enroll electronically. It’s important that the Plan Administrator is aware of their responsibility to avoid potential legal disputes.

As noted in Ilene Ferenczy’s article, Who’s Got My Beneficiary Designation … Or Who Lost It??, a dispute can easily arise when a previously divorced participant forgets to update the beneficiary form after remarrying. The intent is often for the children to be the beneficiary, but the new spouse may have the rights. If there is a dispute over who the beneficiary is, the plan could end up in litigation.

“When a participant dies, you don’t want your historically bad recordkeeping procedures to cause more grief for his or her loved ones.  Help your participants plan for the future by encouraging them to fill out beneficiary designations, and then make it a priority to keep those forms safe.” (Ilene Ferenczy, Who’s Got My Beneficiary Designation … Or Who Lost It??)

Please contact your Watkins Ross plan administrator if you have questions regarding your plan’s beneficiary designation forms.

For information about locating missing beneficiaries in your defined contribution plan, read Finding Missing Participants in Your Defined Contribution Plan.

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