The Importance of Updating Beneficiaries (June 2014)
Now that the new benefit year is about to begin, it is a great time to discuss the importance of updating beneficiaries on both life insurance and retirement accounts. By listing beneficiaries, assets can pass outside of probate. Changes may be necessary due to birth, adoption, death, marriage, or divorce. The University is required by law to follow beneficiary designations regardless of wills or other legal documents. Divorce or death of a spouse is the most common reason life insurance and retirement assets are disbursed to someone other than whom the diseased would have intended. It is not uncommon to discover beneficiaries were never updated and thus assets would go to an ex-spouse rather than a current spouse or children. Children also may not receive intended assets if updates have not been made after marriage, birth, or adoption.
Regular UK employees that work 0.75 FTE or greater are provided a life insurance policy equal to their annual salary at no cost by the University. Even if no additional life insurance is purchased, it is important to provide beneficiaries for this basic insurance. Beneficiaries can be viewed, added or changed for life insurance by logging onto MyUK or providing a new life insurance form to the Benefits office in 115 Scovell Hall.
All regular employees that work 0.75 FTE or greater are also required to contribute to their retirement plans beginning at age 30. If an election has not been made within 30 days of beginning employment or turning age 30, employees will be automatically enrolled with 50% of their contribution going to each Fidelity Investments and TIAA-CREF. These changes can be made through the web portals of each provider or by sending paper forms to the benefits office.
While life insurance changes must be made during open enrollment, beneficiary changes and adjustments to retirement allocations can be made at any time. Adjustments to retirement allocations can be made between carriers and between investments with the carriers. Free, one-on-one appointments can be scheduled with Fidelity Investments by calling 800-642-7131 and with TIAA-CREF by calling 859-224-6900.