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QOTW: Beneficiary Forms

A PSCA member reached out stating that they struggle to get more than 2/3 of participants to complete a beneficiary designation form and wondered if other companies have strategies to increase that rate. This appears to be a very common dilemma among members as only a quarter of respondents indicated that most of their participant have valid beneficiary form on file while 37 percent indicated that 50-75 percent of participants have completed a form.

We asked members if getting participants to complete the beneficiary designation form is a challenge and if they have any successful strategies to share, responses follow.

  • 1/3 filled out right away and update as needed.  1/3 need 2+ reminders.  1/3 ignore me. I send reminders quarterly.
  • 2022 I focused on increasing our beneficiaries on file. I started with monthly reporting then transitioned to quarterly and sending targeted emails. I also worked with Fidelity and our Broker to send out emails and VM to employees encouraging them to add one. It really worked to increase the number
  • Always a struggle - even for new hires. We previously did a push for beneficiaries, and are considering another one for 2023.
  • Can the beneficiary forms be completed digitally?
  • Consistently having the vendor send out blast emails reminders to update beneficiaries
  • Continue to manually remind employees. Can your provider make the beneficiary required as part of the sign-up process?
  • Don't know exactly. Beneficiary audit is on the to-do list. Hard to do because almost all had a paper one on file with HR in 2019, but since then they could also do online with Recordkeeper so need to check two places
  • Fewer than half that have an account balance
  • For our labor population we have handed out paper beneficiary forms at open enrollment each year.  However they are never keyed into the TPA's system so our numbers are probably higher in actuality than they are on paper.  For our professional population, we run an audit each January (after we announce/remind at open enrollment).  E.g., last year there were over 650 w/o designations on file.  Last week, there were only 150 so people are taking action based on that reminder.
  • HR meets with individuals one-on-one during open enrollment & has them verify a list of items, including beneficiary forms for 401k & life insurance.
  • I hound them until they get it to me.  They get so tired of emails & being called to my office, they just want me to leave them alone.
  • I literally just hound the employee until it get it honestly. They get tired of hearing about it and finally get it done.
  • I sure would like to know the answer to this.  As a large plan sponsor (10,000+ participants) I can't get in front of each participant personally, which is probably what it would take. We've tried a number of things with very little success, including messaging on the website, targeted mailings, sending paper forms, doing periodic communication campaigns (mailings, posters, emails, etc.),and including a message and a link or form with our health plan open enrollment materials.  My recordkeeper has begun requiring people to make the designation when someone first activates their online account (they've removed the requirement to know the beneficiary SSN to facilitate this), but not everyone uses the website, and that does not solve the problem for those already with website access but hopefully we will see an improvement due to this. I also have the same issue with my non-USA retirement plans.
  • It is online.
  • Many erroneously feel they do not need a form as they are married and their spouse will receive anyway.
  • Monthly email reminder targeting those that have not completed forms/online beneficiary selection.  I believe they find the online option convenient.  (We use Principal Financial).
  • Most have a paper form on file, only 43% have entered/updated in their account online
  • New participants are provided an email recommending they assign a beneficiary, and we provide likely consequences when no beneficiary is assigned upon death. We also send out a company-wide reminder every year; and participants are advised of any missing beneficiary should they attend an on-site 401k meeting or receive individual investment guidance from our investment advisors.
  • No. We go over it as part of our enrollment and it is implied that it is required to complete their new hire paperwork and process. HR follows up regularly to remind.
  • Our 401k provider sends out email notices when they notice there is not a beneficiary.
  • Our 401k servicer deals directly with the employee and account set up.
  • Physically handing the form to the participants and asking them to fill in the beneficiaries.
  • Send an email to the employees that are missing the beneficiary form or the link to the recordkeeper portal and advise when the form is completed and on record.
  • struggle, it's not part of an automatic process
  • There are no current strategies to improve the percentage of participants with valid beneficiaries. Partnering with the vendor to send out targeted communications to those without a beneficiary on file would probably be effective. Having a pop-window appear with 'Review your beneficiaries' when the participant logs in is another idea that could be considered for prompting action.
  • This was a good reminder to go after those without a beneficiary on file! We'll include this in the new hire onboarding process, going forward.
  • We also struggle with this.  We try to mention it in all communications and send a beneficiary specific email to participants a few times a year.
  • we are 100% electronic via employee self service
  • We are struggling to get employees to complete the beneficiary form.
  • We do struggle to have beneficiary forms completed.  We have had a couple email campaigns but, with waning interest in 2022 as a result of the market performance, we hope 2023 is better and participants become more engaged.
  • We have a small group so I call each employee and explain the importance of adding a beneficiary.
  • We recently held a drawing at one of our facilities for a $250 cash prize.  Participants with a beneficiary form on file received an entry for the drawing.  This was hugely successful, and we intend to do this at all facilities this year.
  • We regularly run reports and target emails to those who haven't completed them.
  • We remind participants who have no designation at least twice during the year to complete this online.
  • We request participants to review their beneficiaries for all benefits at open enrollment and to send us a copy for their personnel files. We follow up with those who don't comply.
  • We require one when they contribute, otherwise it is optional. Some fall through the cracks  We also remind at every Open Enrollment to update, and try to suggest reviewing it at the time of any Life Event that may impact their choices.
  • We sent out physical letters to all participants without beneficiaries and included a flyer from our record keeper.  Over the course of two years, we went from the neighborhood of 1/3 of participants with a beneficiary to 3/4.  Side note, since these individuals had to log into their accounts to do so, many increased their deferral percentage as well
  • We talk about the importance of a beneficiary at our company wide benefit meetings and the one-on-one benefit meetings
  • We typically try to do an annual reminder with links or access to the forms to encourage staff to complete or update.  Our vendor also sends reminders to participants.
  • We work in conjunction with our recordkeeper regarding beneficiaries. There are no forms, participants have to add them via their online 401(k) account for the DC plan.
  • We, as Plan Sponsor, and separately our recordkeeper have sent email communications to participants without a beneficiary designation to encourage them to designate. The emails we've sent as Plan Sponsor have been more successful in generating action with around 3% acting compared to less than 1%.
  • We're closer to 90%.  Yes, I struggle to get them from the remaining EEs.  My strategy is asking multiple times--it's not working.
  • Yes - No successful strategies
  • Yes I struggle.  It is a separate process on paper.  Our employees enroll and pick investments in our payroll system. That system does not allow for the form to be pushed out to them or have them fill it out.  I do an audit every quarter to try to increase compliance.
  • Yes, a struggle. For our Defined Contribution Profit Sharing Plan, Annual statements include blank beneficiary forms and a copy of the form on file, if any, to encourage submitting forms and keeping them up to date. For our 401k, forms are sent when employees enroll and an effort is made to track and get the forms back. Some difficulty getting forms correctly completed and notarized when spouse is not the sole Primary Beneficiary.
  • Yes, they ignore our messages.
  • Yes, we have forever. We've done some pretty big campaigns about it off and on. At the end of the day, I can only spend so much time on it. While it slows the process down, there is a process for when there is no beneficiary, and we follow the process.
  • Yes, we have trouble.  Nothing we've tried seems to work since it is all electronic now.  It seems easier, but has complicated compliance.
  • Yes.  Heavily emphasized at new hire orientation.
  • Yes.  Sometimes when there is a life event at work (e.g. employee death), I try to reiterate the importance of designating a beneficiary.  For our company provided life insurances we built the beneficiary process into Open Enrollment and you cannot complete open enrollment without it.  401k is a different animal so I just have to market doing it a couple times a year.
  • Yes. We struggle to get participants to complete their beneficiary designation.

A few years ago, PSCA's 401(k) Day Campaign focused on beneficiary forms, the full campaign that can be easily adapted and used with participants is available here.