| (2) The plan administrator shall order the distribution to the participant's estate of the balance of the participant's deferrals and investment income. (o) Death of a beneficiary. (1) This subsection applies if: (A) a participant named a beneficiary in a participation agreement, change agreement, or distribution agreement or a beneficiary designation form; (B) the participant died; (C) the beneficiary survived the participant but has since died; (D) the plan administrator has ordered, in accordance with subsection (m) of this section, a distribution to the beneficiary or would have ordered a distribution to the beneficiary if the beneficiary had not died; and (E) the beneficiary did not receive all the participant's deferrals and investment income before the beneficiary's death. (2) If the deceased beneficiary filed a distribution agreement and the agreement names a primary beneficiary, the plan administrator shall: (A) allow the primary beneficiary to have a distribution which will be made at least as rapidly as under the method of distribution selected by the participant, and which will also satisfy the minimum distribution requirements of the Code §457(d)(2), and §401(a)(9); or (B) order a lump sum payment to the primary beneficiary's estate if the primary beneficiary survived the beneficiary who filed the distribution agreement but is not alive on the date of the order. (3) If the deceased beneficiary filed a distribution agreement and the agreement names a secondary beneficiary, the plan administrator shall order a lump-sum payment to: (A) the secondary beneficiary if: (i) the secondary beneficiary is alive on the date of the order; and (ii) no primary beneficiary survived the deceased beneficiary; (B) the secondary beneficiary's estate if: (i) the secondary beneficiary survived the deceased beneficiary; (ii) the secondary beneficiary is not alive on the date of the plan administrator's order; and (iii) no primary beneficiary survived the deceased beneficiary. (4) The lump-sum payment must be made to the estate of the deceased beneficiary if: (A) the deceased beneficiary's distribution agreement does not name a beneficiary; (B) the deceased beneficiary did not file a distribution agreement; or (C) no beneficiary named in the deceased beneficiary's distribution agreement survived the deceased beneficiary. (5) When more than one primary or secondary beneficiary of a deceased beneficiary is entitled to a lump-sum distribution, the distributions must be made in equal shares unless the deceased beneficiary's distribution agreement provides otherwise. (p) Distributions to minors and incompetents. (1) The plan administrator may authorize the payment of a distribution to a person or entity other than the participant or beneficiary otherwise entitled to receive the distribution if satisfactory evidence is presented to the plan administrator that the participant or beneficiary is: (A) a minor; or (B) has been adjudicated by a court of law as mentally incompetent and unable to provide a valid release, receipt and discharge for the payment or is deemed so by the plan administrator. (2) If the conditions of the preceding paragraph are satisfied, the plan administrator shall make the distribution payable to the guardian of the participant or beneficiary. Such payments shall be considered a payment to such participant or beneficiary, and shall, to the extent made, be deemed a complete discharge of any liability of the Plan, state of Texas, plan administrator and TPA for all payments required under the plan. (3) If no guardian has been appointed and after having obtained a proper release, the plan administrator shall make the distribution payable to: (A) the person or entity maintaining custody of the participant or beneficiary; (B) the custodian of the participant or beneficiary under the Texas Uniform Gifts to Minors Act (Texas Property Code, §§141.002 et seq.) if the participant or beneficiary resides in the state of Texas; (C) the custodian of the participant or beneficiary under a law similar to the Texas Uniform Gifts to Minors Act if the participant or beneficiary resides outside the state of Texas; or (D) the court of law with jurisdiction over the participant or beneficiary. (q) Distributions to missing persons. (1) This subsection applies when the plan administrator is unable to determine the location of a participant or beneficiary who is entitled to a distribution. (2) When the plan administrator does not know the location of a participant or beneficiary, the benefits coordinator for the participant or beneficiary must send a certified letter to the last known address of the participant or beneficiary. (3) If the certified letter does not result in the discovery of the location of the participant or beneficiary, the benefits coordinator shall inform the plan administrator and provide proof to the plan administrator that the certified letter was sent. (4) When the plan administrator does not know the location of a participant or beneficiary, the benefits coordinator, TPA or plan administrator shall make a reasonable attempt to locate the participant or beneficiary through certified mail at the last known address, through notification to the Social Security Administration, the Pension Benefit Guaranty Corporation, or other appropriate source. If the participant has not responded within six (6) months, upon receiving the notification and proof of mailing, the plan administrator may direct that all benefits due the participant or beneficiary be deposited in a qualified investment product or trust fund that the plan administrator has specifically designated for this purpose and shall continue to hold the benefits due such person. (r) Processing of distributions and emergency withdrawals. A prior plan vendor or TPA shall process distributions and emergency withdrawals and resolve administrative problems with the plan administrator within a reasonable length of time, not to exceed the 30th day after receiving a letter of authorization for distributions and not to exceed the 15th day after receiving a letter of authorization for emergency withdrawals. (s) Loans to participants. The plan administrator is authorized to implement procedures to establish a loan program for the revised plan in compliance with Code §72(p)(2). Plan loans shall be permitted only from assets deposited in the revised plan. Participants with account balances in the prior plan must transfer those balances to the revised plan in order to qualify for a plan loan. The security of the loan is a pledge. There is a non-refundable application fee for each loan. General loans are processed without any pre-loan paperwork. A participant's execution on the loan check authorizes the plan administrator to make payroll deductions from the participant's compensation (Code §1.401(a)-21(d)). The loan balance may be prepaid at any time without penalty. The maximum number of active loans available to any participant at any given time is two (2) per plan. (1) Loans made pursuant to this section (when added to the outstanding balance of all other loans made by the plan to the participant) shall be limited to the lesser of: (A) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans from all plans to the participant during the one year period ending on the day before the date on which such loan is made, over the outstanding balance of loans from all plans to the participant on the date on which such loan was made; or (B) the greater of one half (1/2) of the present value of the non-forfeitable accrued benefit of the participant under the plan or $10,000. (2) Any loan may not be for an amount less than $1,000. (3) The terms of the loan shall: (A) require level amortization with payments not less frequently than monthly throughout the repayment period, except that alternative arrangements for repayment may apply in the event that the participant is on a bona fide unpaid leave of absence for military leave within the meaning of §414(u) of the Code or for the duration of a leave which is due to qualified military service; (B) require that the loan be repaid within five years unless the participant certifies in writing to the plan administrator that the loan is to be used to acquire a principal residence; and Cont'd... |
