I sent you a new question the other day, but apparently you didn't get it. The question is: assume that the company 401(k) plan gets the proceeds from the life insurance policy - how does the money need to be distributed within the plan? There are 28 participants in the plan. According to the DOL, the only "rule" is that the funds must be somehow equally divided among the participants. There doesn't seem to be any real, written regulations governing this type of situation. Hope you can help - I have talked to the DOL, our insurance agent, the in-house counsel for our TPA, and ING, which is the company that holds the 401(k) plan. Haven't been able to get a clear answer.
Welcome! Thank you for your question. Thank you for requesting me. I did not get your question the other day.
If the plan does get the proceeds. Then the proceeds would be divided among the plan participants like the participants share the the other plan assets. The proceeds would be a plan asset like stock. I would assume divided up based on the proportionate share of ownership in the 401(k). I will tell you that this is only an assumption and the law is not clear on the division.
Over 14 years experience in Medicaid, Estates, Trust.
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