Call me paranoid, but...

I recently filled out the enrollment form for my employer's 401k plan.
Where it asks me to specify a benificiary, the form asked for the
benificiary's name, relationship to me, address, date of birth, and
Social Security number. I filled in everything except for the SS#. I
really don't see why this is required. In fact, I could have sworn I
read/heard (dreamed?) that this was NOT required, that all they really
need is a name and date of birth. Anyway, my employer's HR dept is
insisting that I provide this information about my benificiary, and I
just don't want to provide it.

What I'm looking for is some kind of "official" opinion about this
issue on the Internet, so I can forward the URL to my HR dept. I tried
searching for this myself, but googling for "401k benificiary social
security" is like trying to drink from a fire hydrant. I need someone
with a little bit of inside knowledge who knows where to start!

Thanks!

---

Request for Question Clarification by googlenut-ga on 20 Dec 2005 13:31 PST

Hello richwolfe-ga,

According to the links below, your employer must have the
beneficiary?s social security number in order to report distributions
to the IRS and to request the IRS?s assistance to contact missing
beneficiaries.


Internal Revenue Service
Instructions for Forms
1099-R and 5498
http://www.irs.gov/pub/irs-pdf/i1099r.pdf
?Missing Participants
The IRS administers a letter-forwarding program that could help plan
administrators contact missing retirement plan participants (or
possibly their beneficiaries). To inform individuals of their rights
to benefits under a retirement plan, the IRS will forward letters from
plan administrators to the missing individuals if the administrators
provide the names and social security numbers (SSNs) of the missing
individuals.?

---

?Beneficiaries
If you make a distribution to a beneficiary, trust, or estate, prepare
Form 1099-R using the name and TIN of the beneficiary, trust, or
estate, not that of the decedent.?



Your social security numbers is your Taxpayer Identification Number (TIN).

IRS.gov
Taxpayer Identification Numbers (TIN)
http://www.irs.gov/businesses/small/international/article/0,,id=96696,00.html



If this answers your question, please let me know and I will post this
information in the answer section and close out the question.

Googlenut

---

Clarification of Question by richwolfe-ga on 21 Dec 2005 14:03 PST

Thanks. I suppose that answers my question. Close it out and I'll mark
it "accepted".

Hello richwolfe-ga,

I will repost the information here to close out the question.

According to the Internal Revenue Service document below, your
employer must have the beneficiary?s social security number in order
to report distributions to the IRS and to request the IRS?s assistance
to contact missing beneficiaries.


Internal Revenue Service
Instructions for Forms
1099-R and 5498
http://www.irs.gov/pub/irs-pdf/i1099r.pdf
?Missing Participants
The IRS administers a letter-forwarding program that could help plan
administrators contact missing retirement plan participants (or
possibly their beneficiaries). To inform individuals of their rights
to benefits under a retirement plan, the IRS will forward letters from
plan administrators to the missing individuals if the administrators
provide the names and social security numbers (SSNs) of the missing
individuals.?

---

?Beneficiaries
If you make a distribution to a beneficiary, trust, or estate, prepare
Form 1099-R using the name and TIN of the beneficiary, trust, or
estate, not that of the decedent.?



Your social security numbers is your Taxpayer Identification Number (TIN).

IRS.gov
Taxpayer Identification Numbers (TIN)
http://www.irs.gov/businesses/small/international/article/0,,id=96696,00.html



Googlenut



Successful Google Search Terms:


"social security number" OR "Taxpayer Identification Number" 401(k)
beneficiary OR beneficiaries 2005 site:.irs.gov
://www.google.com/search?hl=en&lr=&safe=off&q=%22social+security+number%22+OR+%22Taxpayer+Identification+Number%22+401%28k%29+beneficiary+OR+beneficiaries+2005+site%3A.irs.gov&btnG=Search

Actually, my friend made me a beneficiary to a 401k about 3 months
ago, the form required him to give my SSN. I was more than happy to
give it... I think it's for taxation.

Since they won't be getting the money for a long, long time, then it
is not needed for taxation.  Leave it blank.  It could be helpful in
finding the person, but I do not think it is required.

I agree with nelson...I just wish I could find something "official" to
show the HR-hounds that this is not necessary. They're trying to tell
me that if I don't provide an SS#, I can't designate a benificiary,
and have to sign a new form electing no benificiary. Which I think is
a crock, but I can't point to anything otherwise.

I don't like my SS# floating around in new placed unless absolutely
required, and my intended benificiary feels the same way!

Actually, now that I read Nelson's post, I think it was life insurance.

I didn't go to the links, but the excerpts posted do not say anything
about a requirement to have the # now.  Of course the number will be
needed at the time of distribution.

dear paranoid,

you did suggest calling you that. this issue comes up from time to
time. you will lose on this issue twice. one because they are within
their rights and requirements to demand the information. two because
even if it was a self-imposed requirement you have no effective manner
of winning the argument. you will argue it isn't required by law and
they will refuse to process the paper work without it. sounds like you
lose anyway. however it will never come to that as there is code on
the subject. it just doesn't support your position. it empowers and
requires them to do exactly what they are doing. to wit:

quoted directly below is internal revenue code TITLE 26, Subtitle F,
CHAPTER 61, Subchapter B, Sec. 6109. the quote is from section a
(supplying of identifying numbers) item 3.

"Furnishing number of another person 
Any person required under the authority of this title to make a
return, statement, or other document with respect to another person
shall request from such other person, and shall include in any such
return, statement, or other document, such identifying number as may
be prescribed for securing proper identification of such other
person."

further down in 6109, in section b (limitations) item d is the following language.

"Use of social security account number 
The social security account number issued to an individual for
purposes of section 205(c)(2)(A) of the Social Security Act shall,
except as shall otherwise be specified under regulations of the
Secretary, be used as the identifying number for such individual for
purposes of this title."

seems clear to me. at the time of filing, the identification of a
third party is required and the social security number is specifically
addressed as identification of choice.

But nothing is being "filed" with the govt. until many many many years
from now when richwolfe-ga passes on.  And no, out of context, that is
not clear.

what is being filed is a designation of beneficiary, among other
things. that would be covered by the phrase, "return, statement or
other document". sorry you missed that. neither is anything out of
context. it is the irs code authorizing the requirement as the
questioner inquired. sorry you missed that. you see, semantic
arguments are only interesting when there are semantics. when
richwolfe dies is of no relevance to the issue at hand no matter how
clever you want to attempt to make your perspective. the operative
time frame is the phrase, "shall include in any such return, statement
or other document". you see "shall include in" means when you fill out
the papers, not when you decide to die at some later date. sorry you
missed that. to english speakers it is fairly clear.

Thanks for all the input, everybody. I wound up just going ahead and
providing the SS number after all, just to save the headache. It was
just the principle of the thing. I'm in my 30s, and this isn't a job
that I'm likely to have for more than 2-3 years. The chances that I
would die during that time period are, what, 1-in-100,000? I guess if
this comes up again in the future, maybe it would be easier to simply
not specify any beneficiary at all, and just make sure that my will is
explicit about this point.

Hi Cynthia, richwolfe is right in saying that the IRS needs your
beneficiaries SS#.  Since 401(k) distributions are taxable as income
with respect to the decedent they want to know who got the money if
you were to die so that they can know who owes them taxes on your
money!  That is why it is required.  It is also required for the
purchase of life insurance even though the death benefit is not
taxable in most cases.  They like to keep an eye on it.  As far as
your last comment, you are off by a factor of 100.  Based on the 2001
CSO Mortalitly table, if you are 35, 1 out of 1,000 females aged 35
years will die each year.  Your chances are higher than you think!!

I am a 401(k) consultant with 30 years experience. The IRS has
established rules that require the that a distribution be reported to
them using a valid SSN, as was noted in an earlier comment. But your
question is whether your employer can require this information now -
before a distribution is made. The answer is YES. The employer
sponsors the plan and it is their plan and they can make the rules as
long as they are prudent and they implement them nondiscriminantly and
in accordance with IRS and DOL regulations. The IRS and DOL do not
have any rules which PREVENTS them from requiring a SSN, so they can.
The employer is required to have it to be able to report any
distribtion, so they are acting prudently to require that you provide
the basic information necessary for them to be able to do that. By not
following their (the employer's) rules, your beneficiary designation
is not valid and they are within their rights to refuse it. If you
died and the person you put on the form without the SSN sued them in
federal court to collect it, he/she would lose because you were
paranoid and wouldn't follow their rules, which any court would rule
were perfectly acceptable. The plan can, by law, only pay a valid
beneficiary who applies for the benefit. So if your spouse (who by law
is always the default beneficiary) applied, they would pay her (but
only if she supplied her SSN) and if you are not married, then they
would pay your estate if your executor applied. Most employer's just
put this form is a file. What are you worried about?