If You Die Before You Begin to Receive Benefits
If you die before your retirement income begins, the current full value of your account balances in all investment funds will be payable to your beneficiary under any of the payment options elected by the beneficiary and allowed by the investment account administrator, subject to the IRS minimum payment rules.
You choose a beneficiary at the time you enroll in the Retirement Plan. You may change your beneficiary at any time by filing a Designation of Beneficiary Form with Human Resources. However, if you are married, federal law requires that your spouse be your beneficiary unless your spouse consents, in writing, to your naming another beneficiary. This consent must be witnessed by a plan representative or notarized by a notary public. If your marital status changes after you become a participant (you marry, divorce or separate, or your spouse dies), be sure to contact Human Resources immediately to make any appropriate changes in your designated beneficiary. If you are divorced and then remarry, your prior beneficiary designation(s) will become invalid and your spouse will automatically become your beneficiary unless you designate another beneficiary with your spouse’s written consent (witnessed by a plan representative or notary public).
Under current federal income tax laws, your beneficiary must receive the entire value of your accounts within five years of your death. As an exception to this rule, payments may be made in the form of an annuity or installments to your designated beneficiary (including your spouse). If an annuity is paid, it must be an annuity with a guaranteed period or a fixed period no longer than your designated beneficiary’s life expectancy.
Generally, annuity or installment payments must begin by the end of the year after the year of your death. However, if your spouse is your designated beneficiary, he or she may postpone the start of benefits until a later date, but not later than the date on which you would have reached age 70.
Fidelity allows your beneficiary to receive a lump-sum distribution of account balances, to roll over account balances into an IRA or other plan (spouse only), or to receive the full value of accounts over a five-year period.
TIAA-CREF allows you to choose one of the following options, which are explained in detail in your annuity contract(s), for payment of the death benefit; you may also leave the choice to your beneficiary.
- Income for the life of the beneficiary with payments stopping at the time of his or her death
- Income for the lifetime of the beneficiary, with a minimum number of payments guaranteed in any event. The period of guaranteed payments must be 10, 15, or 20 years (subject to IRS rules).
- Income for a fixed period of years (subject to IRS rules)
- Subject to IRS rules, the accumulation may be left on deposit with TIAA-CREF for future payment under any of the above options
- A lump-sum distribution of the account balances or rollover into an IRA or other plan (spouse only)
Note: If you still have a balance in the TIAA Real Estate Account, the only form of payment available under the TIAA Real Estate Account is full or partial cash withdrawals. Balances may be transferred from any of the other funds under the plan to any of the annuity accounts to receive the payment methods described above.
Federal pension legislation requires that if you die leaving a surviving spouse and you have not named a beneficiary, all of your death benefits will be paid to your spouse.
The selection of a beneficiary and the form of payment to the beneficiary, should you die, can have important income and estate tax consequences. If you have questions about these subjects, see a qualified advisor.