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  • Beneficiary Information

Are there any restrictions on naming a beneficiary at retirement or changing my beneficiary after retirement?

You may name any person you wish as your beneficiary at retirement, or you may name your estate. If you are selecting periodic payments, you will provide the name of your beneficiary on the Distribution Request Form. If you are purchasing an annuity through an insurance company, you will also need to provide the name of your beneficiary on the Annuity Contract Application. Unless you have selected a life annuity with a joint and survivor feature, you may name more than one person as beneficiary, you may name a contingent beneficiary, and/or you may change your beneficiary after you have begun drawing benefits. Contact Empower for the applicable form(s).

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Who should my beneficiary contact after my death?
Upon your death, whether before or after retirement, your beneficiary should contact Empower Nashville office for information and appropriate forms.

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What withdrawal rules will apply to my beneficiary?
If you have at least $5,000 in your account and you die before beginning distributions, your beneficiary will have two choices: (1) the beneficiary may withdraw your full account balance within five years after the year of your death, or (2) the beneficiary may elect to withdraw the full account balance over his or her life expectancy. Unless your beneficiary is your spouse, he or she must begin distributions by December 31 of the year following the year of your death in order to be eligible to withdraw the account balance over his or her life expectancy. A spouse who is named as beneficiary may elect to wait to begin distributions until December 31 of the year you would have turned 70 1/2 by filing a Spousal Beneficiary Request Form with Empower. (If the spouse is the only beneficiary of the account, submitting this form will also give that spouse control of the investment of the account.)

If you die after beginning distributions, your beneficiary must withdraw any remaining funds at least as quickly as they would have been distributed under the payment method you were using; unless the beneficiary is the spouse, in which case the payments may be made over the spouse's life expectancy.†

If your estate is named as your beneficiary, or if you have less than $5,000 in your account, distribution must be taken in a lump sum within five years after the year of your death.

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Are there any special tax rules applicable to beneficiaries?
Distributions paid to a beneficiary are taxable to that beneficiary; distributions paid to an estate are taxable to the estate. Distributions to a beneficiary from the 457 plan or the 401(k) plan are reported on a 1099-R form in the beneficiary's name. Lump sum distributions from either plan to the participantís spouse may be rolled over to an IRA or to any other eligible tax-deferred plan in the spouseís own name. Lump sum distributions from the 401(k) plan issued after a participantís death may be eligible for forward averaging if the participant would have been eligible for forward averaging. Beneficiaries are not subject to the 401(k) plan's early distribution tax penalty, regardless of the participant's age at the time of death. For more information, refer to IRS Publication 575, Pension and Annuity Income.

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