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 Fidelity (subject to the federal income tax laws described in more detail below).
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 in the BU Retirement Plan (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).
Current federal income tax laws contain several requirements regarding the distribution of your account balance after you die. If your designated beneficiary under the BU Retirement Plan is your surviving spouse, a minor child (until reaching the age of majority), is chronically ill, or is not more than 10 years younger than you, your benefits may be paid over the course of your beneficiary’s life expectancy. Other beneficiaries designated under the BU Retirement Plan must receive the entire value of your accounts within ten years of your death. Beneficiaries that are not designated under the BU Retirement Plan (for example, your estate and certain trusts) must generally receive the entire value of your accounts within five years of your death.
Generally, installment payments must begin within one year of your death. However, if your spouse is your sole designated beneficiary, he or she may postpone the start of benefits until a later date, but until no later than the date on which you would have reached age 72.
Your beneficiary may receive a lump-sum distribution of account balances, roll over account balances into an IRA or other plan with payments under IRS minimum distribution rules, or receive the full value of accounts over the maximum distribution period.
Federal pension legislation requires that if you die leaving a surviving spouse and you have not named a beneficiary, all of your death benefit 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.