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If your client dies before taking retirement income, the accumulation
in his/her contracts will be payable to the designated beneficiary(ies).
We'll accept notice of a customer's death in writing or through our
Telephone Center at 1 800 842-2776, Monday through Friday from 8 a.m. to 10 p.m., ET.
(Please note: Our busiest times are from noon to 2:00 p.m., ET, and our busiest day is
Monday.) We do not at present accept death notifications by e-mail.
Once we've been notified of a participant's death, we send an information
package to the beneficiary, usually within five working days. The package
includes a request for an original death certificate. When the beneficiary
has decided among the available choices for taking survivor benefits,
we send the necessary application and forms.
Final Premium Information
If your client was participating in an employee retirement plan at the
time of death, we also send the employer a "final contribution letter"
requesting the dates and amounts of any contribution(s) due for the participant's
final month's salary. The letter also asks the institution to guarantee
payment of contributions if we haven't received them by the time we've
received all other required information. If the institution provides the
guarantee, we'll pay the survivor benefits before we actually receive
the final contribution(s). If the contribution can't be guaranteed, survivor
benefits will be delayed until we actually receive funds from the employer.
Contributions paid after your client's death are limited to those specified
by the institution's plan provisions. No "extra" contributions are permitted,
and we must receive all outstanding contributions within three months
of the participant's death.
Survivor Payment Methods
Your client's beneficiaries can choose from several payment options:
The TIAA-CREF Savings and Investment Plan lets the beneficiary leave
funds invested. If desired, payments from the plan can be structured to
preserve as much of the benefits as possible by taking just the minimum
distribution required by law each year.
Lifetime annuities are available with or without guaranteed periods.
Both the TIAA Traditional Annuity and our variable accounts offer fixed-period
payments from 2 to 30 years.
A beneficiary who is the participant's spouse may roll over all
or part of the taxable benefits to an Individual Retirement Account (IRA),
or to the TIAA-CREF Rollover IRA. To qualify, the spouse has to roll the
entire benefit over to an IRA within sixty days of payment. The distribution
is subject to 20 percent federal income tax withholding unless the money
is rolled over directly to an IRA.
Survivor benefits can be taken in a single cash withdrawal.
Tax Considerations
Ordinarily most if not all of the annuity accumulation is fully taxable
when the beneficiary receives it. The taxable portions are contributions
made by the employer and earnings attributable to them. The tax-free portion,
if any, would be that which represents salary deduction (after-tax)
contributions and any direct personal contributions the participant made
to the TIAA and CREF contracts.
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