It is important to understand how MNDCP account assets are distributed upon your death to avoid an improper beneficiary designation or unforeseen surprises. You are encouraged to periodically review your beneficiary designation to ensure it is up-to-date.
Why designate a beneficiary
Life events - including marriage, divorce, death or children growing up - can impact who will receive any remaining assets in your MNDCP account upon your death.
When you name a beneficiary (other than your estate) on your MNDCP account and certain other retirement plan accounts (IRA, 403(b), 401(k), insurance or annuity contracts) the beneficiary designation you made generally supersedes your will, and thus, avoids the costly probate process. Upon your death, assets in your MNDCP account transfer directly to your designated beneficiary(ies).
If no beneficiary designation on file
If you do not name a beneficiary or no named beneficiary(ies) survive you, your MNDCP account automatically defaults to:
- your current spouse as your sole primary beneficiary.
- if you do not have a current living spouse, a lump sum payment will be made to your estate.
To name, change, or remove your beneficiary designation
Complete a Beneficiary Designation form (pdf) or Login to your Account Online. A beneficiary designation is effective upon receipt by MSRS and supersedes all prior designations. A valid beneficiary designation must be on file with MSRS prior to your death.
If the beneficiary predeceases you
If your named beneficiary predeceases you, their share is distributed to any surviving beneficiaries. For example, let's say Paul and Laura are your primary beneficiaries and Laura died. Assuming you don't change your beneficiary designation before you die, Paul would inherit 100% of the assets in your MNDCP account. Laura's share would not be paid to her living children (unless a per stirpes designation was elected/made).
Your beneficiary designation after a divorce
In the event of a marriage dissolution, your MNDCP beneficiary designation naming your former spouse becomes void unless the divorce decree provides otherwise. You may re-designate your former spouse after the divorce by completing a Beneficiary Designation form (pdf).
Refer to Minnesota Statute 524.2-804