Inherited 401k
401k plan participant died in 2013
Her beneficiaries (2 siblings) sent a death certificate to her form employer (where she was a participant in their401k plan)
The employer responded there no retirement asses held for the mom.
In 2020 the siblings were told there are retirement assets and they had 5 years to withdraw all funds.
Al inherited funds have since been distributed to the siblings.
The siblings ideally would have liked to “stretch” payouts (starting in 2014)
What recourse (if any) do they have? What role does ERISA’s statue of limitations play
All help is appreciated.
Permalink Submitted by Alan - IRA critic on Thu, 2023-02-02 17:36
Once a distribution is made to a non spouse beneficiary, there is no way to restore the funds or to avoid reporting the 1099R income. However, if there was sufficient negligence on the part of the plan administrator with little or no contributary negligence on the part of the beneficiaries, there could be justification for legal action against the plan. I don’t know how any ERISA SOLs play into this, and many 403b plans are not ERISA plans. Unless the amount distributed and the specifics of the failure justify expensive litigation, best to live with it.