Distribution error by administrator contrary to election | Ed Slott and Company, LLC

Distribution error by administrator contrary to election

Client is a nonspouse beneficiary of her mother's Section 457 plan account. Her mother died in Sept. 2007. The plan administrator represented that the plan did now permit nonspouse beneficiaries to elect a direct rollover to an IRA. The client was given 90 days to make the election. Prior to the expiration of the 90 day limit she elected to rollover the account to an inherited IRA. She sent detailed instructions to the employer. Contrary to the written instructions and telephone discussions, the employer issued a check for the full value of the account directly to the beneficiary and withheld 10% for Federal income taxes. We are sending the check back to the employer pointing out the obvious error. Does anyone have any thoughts or experience with a similar situation? I would hate to think that an error on the part of the employer/plan administrator would require the beneficiary to accept the check and lose the value of continued deferrral. Thank you for your assistance
 

Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.
 

I agree to the terms and services:

You may review the terms and conditions here.