In 1996 the Profit Sharing/401(k) Council of America (PSCA) introduced 401(k) Day to be acknowledged the Friday after Labor Day. This year the 401(k) Day campaign brings awareness to the importance of making sure participant beneficiary designations are up to date.
Upon enrollment in a Pension Inc. retirement plan, a participant should designate their primary and contingent beneficiaries by form (or online if activated). Beneficiary elections should be maintained in company personnel records with a copy provided to Pension Inc. (if desired).
If a participant does not designate a beneficiary, the Pension Inc. sponsored plan document provides the following order of priority:
1. Surviving spouse; and if no spouse to
2. Children (including adopted children); and if none to
3. Surviving parents; and if none to
4. The Participant’s estate.
Despite the default priority, participants should be encouraged to review their designations yearly and upon life-changing events. This helps avoid benefit processing delays and unnecessary fees. With this year’s 401(k) Day campaign, the PSCA reminds us that deciding who inherits retirement plan assets is critical and should not only be handled once and forgotten.