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Target Five Accounts Employees Must Update After Divorce

'Target employees should remember that after major life events, keeping beneficiary designations current is just as important as updating a will, since outdated records can unintentionally redirect assets.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'Target employees often underestimate how quickly outdated beneficiary designations can derail retirement intentions, making it important to review all accounts after divorce or other life changes to keep plans aligned with current goals.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

Why it is critical to review beneficiary designations after divorce.
The types of accounts most affected, including 401ks, IRAs, life insurance policies, bank accounts, and pensions.
How overlooking updates can impact long-term planning.

Five Crucial Accounts to Examine Following a Divorce

Divorce impacts far more than just a will. For Target employees, skipping updates on certain accounts could unintentionally transfer substantial assets to an ex‑spouse. Beneficiary designations—legally taking precedence over will instructions—decide who receives assets across many account types.

Employer Retirement Plans and 401ks

For Target employees with 401k plans, the Employee Retirement Income Security Act (ERISA) mandates that distributions follow the beneficiary on record, regardless of will directions. That means updating beneficiary forms after divorce is essential.

Individual Retirement Accounts (IRAs)

Both traditional and Roth IRAs transfer directly to the named beneficiary, bypassing probate. For Target professionals who hold personal IRAs in addition to employer retirement plans, it's important to keep designations current.

Life Insurance Policies

Insurance companies must pay death benefits to the beneficiary listed on the policy. Many Target employees have life insurance as part of their benefits package, making updates after divorce an important consideration.

Bank and Brokerage Accounts with TOD or POD Instructions

Accounts labeled “transfer‑on‑death” (TOD) or “payable‑on‑death” (POD) bypass probate and transfer according to the listed beneficiary. Target employees should check these instructions closely—outdated designations may funnel funds to unintended recipients.

Pension Benefits

Similar to corporate retirement plans, Target pensions distribute according to the beneficiary on file and may be affected by divorce decree terms. Reviewing these provisions is a vital step after divorce.

Important Reminder

After significant life events—like divorce, marriage, the birth of a child, or the death of a family member—Fortune 500 employees should reassess all accounts with designated beneficiaries, not just the five categories mentioned.

Why This Matters

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Divorce affects more than wills. If retirement and other accounts are not updated, assets may unintentionally flow to an ex‑spouse. Target employees should revisit pensions, ERISA‑governed 401ks, IRAs, life insurance policies, and TOD/POD accounts after divorce. Because beneficiary designations generally override wills, neglecting them after major life events can lead to unintended asset distribution.

Final Thought

Updating beneficiary designations is like refreshing the blueprint for your retirement path. If outdated names remain, instructions will be followed—even if other documents say differently. For Target employees, not reviewing accounts—such as 401ks, IRAs, life insurance policies, TOD/POD bank accounts, and pensions—may result in assets going to unintended recipients. Thoughtful updates help keep your planning aligned with your present-day goals.

Sources:

1. Principal. ' If you're getting divorced, what's next for your financial plan .' August 1, 2025.

2. Varghese Summersett. ' Post-Divorce Checklist: Steps to a Successful Fresh Start .' June 27, 2024.

What are the key benefits provided by Target Corporation's Personal Pension Account and Traditional Plan for employees approaching retirement, and how do these plans ensure financial security during retirement years? Understanding the synergy between these two plans is essential for retirees, as they work together alongside Social Security and personal savings to replace a portion of an employee's paycheck after retirement.

Key Benefits of the Personal Pension Account and Traditional Plan: Target Corporation's pension plan includes two components: the Personal Pension Account and the Traditional Plan. These plans work in tandem to replace a portion of an employee's paycheck during retirement. The Personal Pension Account provides pay credits and interest that accumulate over time, while the Traditional Plan uses a final average pay formula. Together with Social Security and personal savings, these plans help ensure financial security in retirement(Target Corporation_Dece…).

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Payment Options and Spousal Consent: Employees can elect different payment options, including the Single Life Annuity, which provides the highest monthly benefit and ceases at the retiree’s death, or the Joint and Survivor Annuity, which continues payments to a surviving spouse. To elect a non-spouse as a joint annuitant, spousal consent is required, and this must be notarized to ensure compliance with plan rules(Target Corporation_Dece…).

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Circumstances for Denial of Benefits under the Traditional Plan: Benefits under the Traditional Plan may not be paid if an employee leaves before becoming vested (less than three years of service). Employees should ensure they meet the vesting requirements and maintain eligibility by avoiding termination before they reach the minimum service period(Target Corporation_Dece…).

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Reporting Changes in Marital Status or Beneficiaries: Employees must promptly report changes in marital status, address, or beneficiaries to Target's Benefits Center to ensure their pension records remain up-to-date. Failing to do so can lead to delays or issues in processing pension benefits(Target Corporation_Dece…).

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Final Average Pay Calculation: Target Corporation calculates final average pay based on the five highest years of earnings out of the last 10 years of service. This includes regular pay, overtime, bonuses, and commissions but excludes items like workers' compensation or long-term disability payments(Target Corporation_Dece…).

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Rolling Over 401(k) into the Pension Plan: Employees can roll over their 401(k) accounts into the Pension Plan using the Pension Purchase Program. This option offers several advantages, including avoiding fees associated with purchasing annuities outside the plan and receiving a stable income stream during retirement(Target Corporation_Dece…).

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Plan Terminations or Amendments: In case of plan terminations or amendments, vested benefits are protected, and employees will receive their earned pension. If the plan is amended or terminated, Target ensures that vested benefits are distributed according to the plan's terms(Target Corporation_Dece…).

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Unused Vacation Time and Pension Calculations: Unused vacation time does not directly affect pension benefits but can be included in eligible earnings calculations that determine final average pay. Employees nearing retirement should consult with Target’s Benefits Center to understand how unused time may impact their overall benefits(Target Corporation_Dece…).

How can employees contact Target Corporation for assistance with their retirement benefits to address any questions or concerns they may have about their pension plans? Accessing the right resources and support is essential for employees to navigate their retirement benefits effectively. They can reach out to the Target Benefits Center at 800-828-5850 for more specific inquiries related to their personal circumstances. These questions aim to enhance employees' understanding of their retirement benefits, ensuring they are well-prepared for their transition into retirement.

Contacting Target for Pension Assistance: Employees can contact the Target Benefits Center at 800-828-5850 for assistance with their retirement and pension plans. This center provides support with any questions related to pension options, payments, and administrative requirements(Target Corporation_Dece…).

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For more information you can reach the plan administrator for Target at 10 South Dearborn Street 48th Floor Chicago, IL 60603; or by calling them at 1-800-440-0680.