Feel “SECURE” Navigating the IRA Death Benefit Claims Process
By Jodie Norquist
IRA beneficiary options have always been complex, but recently they’ve become even more complex. Processing IRA beneficiary, or death benefit, claims grew more challenging this year with the passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, included in the Further Consolidated Appropriations Act, 2020. If your IRA program is self-administered, do you feel confident that you understand the new payout rules? Do you and your staff understand the differences between an “eligible designated beneficiary” and a “designated beneficiary” and what these designations may mean to your clients’ beneficiaries?
Providing timely and error-free tax reporting for your clients and their beneficiaries can be challenging, especially with ever-evolving IRS reporting changes enacted in response to the coronavirus (COVID-19) pandemic.
Beneficiary Distributions
No need to worry if you don’t know all of the new beneficiary rules—Ascensus can take care of you and your beneficiary clients by providing complete administrative, operational, and compliance support. Since the SECURE Act became law, Ascensus has lead the way in response to these retirement industry changes by rapidly updating its forms and software, and offering educational webinars that allow financial organizations like yours to stay on top of compliance issues.
Ascensus’ Fully-Administered Program for IRAs provides fast, stress-free administration of death benefit claims. How? By using IRAdirect,® a secure, online processing system with compliance logic that catches errors and verifies the accuracy of your tax reporting forms. This allows you to focus on building your business, while we take care of everything else. Ascensus associates process over 18,000 claims from beneficiaries each year.
Inherited IRAs
Dealing with inherited IRAs just became a whole lot easier. Here’s how processing a death benefit claim through Ascensus’ Fully-Administered Program works: When you receive notification by next of kin that an IRA owner has died, you will complete an online Death Notice in IRAdirect for the claims team, similar to the process of filing an insurance claim. You’ll answer questions related to the IRA owner and his or her beneficiaries and this information will determine eligibility for beneficiary payment options. After completion of a death benefit claim, Ascensus associates will take care of everything else, determining who receives the death benefits and mailing out the proper forms to beneficiaries. Completed forms can be reviewed by your staff, allowing you to retain full control of each transaction.
Software enhancements have also been made to IRAdirect’s Incoming Beneficiary Scheduled Payment Election Wizard that make it easier for you to establish an inherited IRA for a beneficiary who is moving assets to your financial organization from another organization. Ascensus will perform the proper tax reporting and will send notifications to beneficiaries who need to take required minimum distributions.
IRAdirect includes help text to answer any questions you may have as you navigate the system. Ascensus also offers webinars to teach you about using IRAdirect and its new system features.
That’s it. Simply put, IRAdirect can save you time and you’ll avoid the risk of noncompliance.
Want to know more about how beneficiary options have changed after the SECURE Act?
Beneficiary Option Changes, a three-minute video in the Ascensus SECURE Act micro-learning series, provides a snapshot of retirement-related SECURE Act provisions.
