Keeping Beneficiary Designations Up to Date

Many  plan administrators have a challenge with participants not keeping their beneficiary designations up to date. Keeping beneficiary information current is important to a participant’s family and their future financial well-being. Unfortunately, it’s easy for participants to forget this critical designation when life changes occur.

If a participant has a life change – e.g., marriage, divorce, new children, death of a beneficiary – it is important for the beneficiary information to be revisited. The most recent beneficiary information in a participant’s account records on file with the plan sponsor or provider will determine where any remaining assets will be paid upon the participant’s death. If the beneficiary information is outdated, the assets may not be paid as the participant would have intended at the time of their death. It is generally recommended that participants check all estate planning documents – including all beneficiary designations – every three to four years, or whenever a life change occurs.

Your plan provider can help identify those participants that do not have beneficiaries on file. They can put notices on the participant’s online account to remind them to check their beneficiary information on file. You can also ask your provider representative to integrate questions about beneficiary designations into each participant meeting, to help keep the information as current as possible.