Administering Retiree Deaths

When a pension payee dies, you need to stop payments and possibly begin beneficiary payments. For contributory plans, you need to check that the retiree recovered all contributions, and that all posttax contributions were recovered as nontaxable benefits.

You use the Payee Payment Schedule page to stop payments to a retiree who dies. You do this by changing the Payment Status field value to Stopped.

You need to record tax, direct deposit, and deduction information on the Identify Payment-Related Info page.

You may need to make a partial payment for the month of death, recover overpayments for time since the death, and adjust the payee's balances to reflect any recovered money so that the amount does not appear on the payee's 1099-R. You do this on the Make One-Time Adjustments page.

The following table summarizes the actions you perform to stop a retiree's payments:

To manually update the pension status of a participant who dies, access the Identify Pension Status page.

Set the status to either Deceased-With Beneficiary or Deceased-No Benefit/Beneficiary.

If you fail to update the status, the payment process automatically sets the status to Retired-Payment Complete the next time it runs. This affects the Form 5500 Participant Count report, which is based on pension statuses.

Depending on the optional form of payment selected by a payee, there may be a survivor benefit due to a beneficiary when a retiree dies.

You can find information about this on the Payee Payment Schedule page:

• The payee's payment schedule shows the form of payment.

• A non-zero value in the Percent Continued field indicates that there is a survivor benefit.

• The system-calculated benefits show the beneficiary amount on the original payee's schedule.

If there is a survivor benefit and the beneficiary is still alive, you need to set up the beneficiary as a pension payee and start making survivor payments. You do this on the Create Payee and Payee Pension Status pages.

You do not have to record an optional form of payment selection because the payment amount is determined by the original retiree's payment form.

You need to set up the beneficiary payment information:

1. Access the Make One-Time Adjustments page.

   1. Enter the benefit plan from the retiree's benefit.

   2. Enter the payment number from the retiree's benefit.

      The system automatically fills in the payment information, using appropriate amounts from the retiree's payment schedule.

2. Access the Payee Payment Schedule page.

   1. Enter a payment status: Active, Deferred, Stopped or Suspended.

   2. Set the payment choice to the appropriate beneficiary payment.

The following table summarizes the actions you perform to set up beneficiary payments: