Beneficiary Rule Change for Divorcing Retirement Plan Participants

When an employee divorces, there can be numerous impacts to that individual’s employee benefits. In a change to plan policy meant to help ease financial and emotional burdens for members’ families, starting January 1, 2026, when a participant in the Retirement Security Plan or 401(k) Pension Plan divorces, any spousal beneficiary designation will be revoked. The ex-spouse will no longer be the beneficiary if previously named on the beneficiary form.

Both plans have been amended with this change, and the Divorce event on the Employee Benefits website also reflects the new plan rules.

This new rule applies to individuals who are participants in the RS and 401(k) Plans as of January 1, 2026. In these cases, the contingent beneficiary, if any, will become primary beneficiary. If there is no other beneficiary named, then default beneficiary rules apply (see “If No Beneficiaries Are Designated” on this page).

The revocation of beneficiary applies only to beneficiary designations that were made prior to divorce and name the now ex-spouse.

Also note that this change does not impact any designation made through a qualified domestic relations order.

If a participant wants their ex-spouse to be the beneficiary of their RS or 401(k) Plan benefit, the participant will need to complete a new beneficiary designation. Note that any active participant who was already divorced as of January 1, 2026, and intentionally did not update their beneficiary form to remove their former spouse as beneficiary should also complete a new beneficiary designation to ensure that their beneficiary designation accurately reflects their intent.

All participants are still encouraged to review their beneficiary designations after any life event to ensure they reflect their wishes.

Please also note that this new rule applies only to RS Plan and 401(k) Plan benefits.

If you have questions about beneficiary rules, please reach out to the Retirement Compliance team at pension.compliance@nreca.coop.