J. Bringhurst Posted October 19, 2007 Share Posted October 19, 2007 I'm sure that this has been addressed, but I cannot seem to find the question posed: With regards to the new 75% QJSA requirements (effective for plan years beginning after 12/31/07), are the requirements effective for elections made for plan years beginning after 12/31/07, or for distributions made for plan years beginning after 12/31/07? Thanks in advance. Link to comment Share on other sites More sharing options...
tuni88 Posted October 22, 2007 Share Posted October 22, 2007 What? We have to add another payout optional form to our plan? I wonder what else will be needed. Has anyone published a checklist or the like? Link to comment Share on other sites More sharing options...
JanetM Posted October 22, 2007 Share Posted October 22, 2007 It was my understanding that it is for benefits payable after 12/31/07. This will make it messy for those who like to get all the paperwork done so they get the first check on first day of 2008. tuni - if J&S is less then 75% you now have to offer 75% J&S. If J&S is 75% or greater you have to add a 50% J&S. This will be called the "qualified optional survivor annuity. JanetM CPA, MBA Link to comment Share on other sites More sharing options...
katieinny Posted November 6, 2007 Share Posted November 6, 2007 A DB plan has the normal 50% QJSA, and also offers an optional 100% JSA. Doesn't that satisfy the new QOSA requirement since it is more than 75%? Link to comment Share on other sites More sharing options...
JanetM Posted November 6, 2007 Share Posted November 6, 2007 My understanding is that even if the normal is 50 and optional is 100, the normal is still less then 75 so you have to add the 75. If I am wrong someone please correct me. JanetM CPA, MBA Link to comment Share on other sites More sharing options...
Guest KennyH Posted November 7, 2007 Share Posted November 7, 2007 My understanding is that even if the normal is 50 and optional is 100, the normal is still less then 75 so you have to add the 745.If I am wrong someone please correct me. That is my understanding. Basically if the QJSA is less than 75% the QOSA (Qualified Optional Survivor Annuity) is 75%. If the QJSA is >= 75% the QOSA is 50%. Everything depends on the definition of QJSA and ignores optional benefits to the extent they do not specifcally satisfy the 75% requirement. Link to comment Share on other sites More sharing options...
katieinny Posted November 7, 2007 Share Posted November 7, 2007 I'll advise the client to amend by adding the 75% QOSA, but it doesn't make sense to force plans to amend that already offer other options. I must be missing something. Link to comment Share on other sites More sharing options...
Guest KennyH Posted November 7, 2007 Share Posted November 7, 2007 Seems pretty straight forward, unless i have missed some clarifying guidance somewhere. 417(g) DEFINITION OF QUALIFIED OPTIONAL SURVIVOR ANNUITY. -- 417(g)(1) IN GENERAL. --For purposes of this section, the term "qualified optional survivor annuity" means an annuity -- 417(g)(1)(A) for the life of the participant with a survivor annuity for the life of the spouse which is equal to the applicable percentage of the amount of the annuity which is payable during the joint lives of the participant and the spouse, and 417(g)(1)(B) which is the actuarial equivalent of a single annuity for the life of the participant. Such term also includes any annuity in a form having the effect of an annuity described in the preceding sentence. 417(g)(2) APPLICABLE PERCENTAGE. -- 417(g)(2)(A) IN GENERAL. --For purposes of paragraph (1), if the survivor annuity percentage -- 417(g)(2)(A)(i) is less than 75 percent, the applicable percentage is 75 percent, and 417(g)(2)(A)(ii) is greater than or equal to 75 percent, the applicable percentage is 50 percent. 417(g)(2)(B) SURVIVOR ANNUITY PERCENTAGE. --For purposes of subparagraph (A), the term "survivor annuity percentage" means the percentage which the survivor annuity under the plan's qualified joint and survivor annuity bears to the annuity payable during the joint lives of the participant and the spouse. Link to comment Share on other sites More sharing options...
Andy the Actuary Posted November 16, 2007 Share Posted November 16, 2007 So, let's say a plan offers as the automatic survivor annuity a J&50% and that the Plan also offers an optional J&100%. Can we simply redefine the automatic survivor annuity to be a J&100% and the optional to be a J&50% and then we don't need to offer an optional J&75%? The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice. Link to comment Share on other sites More sharing options...
abanky Posted November 20, 2007 Share Posted November 20, 2007 does an amendment have to be done by 12/31/07? Link to comment Share on other sites More sharing options...
Effen Posted November 20, 2007 Share Posted November 20, 2007 I have asked several attorneys this question and they all tell me "no". No one seemed too concerned about the need to add QOSA J&75 option, even if the option wasn't in the plan. Any attorneys want to chime in? The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice. Link to comment Share on other sites More sharing options...
John Feldt ERPA CPC QPA Posted November 20, 2007 Share Posted November 20, 2007 I am not an attorney. Was this part of PPA 2006, thus no amendment is needed until 2009? Perhaps an SMM might be needed before the amendment even gets done? Link to comment Share on other sites More sharing options...
Andy the Actuary Posted November 20, 2007 Share Posted November 20, 2007 I can honestly say that I have a number of plans that offer a J&75% or J&66% and have never seen these options elected. It's probably just time to include the x*&$#@! option and quit talking about it. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice. Link to comment Share on other sites More sharing options...
Guest SVP Posted November 22, 2007 Share Posted November 22, 2007 If you change the QJSA to 100% from 50% and designate the 50% JS as the QOSA just be careful that you don't have an unintended impact on the QPSA. They are linked. You might also have to check that the new 100% QJSA is still the most valuable and your relative value calculations may be impacted. Otherwise it's clever way to not have to add the 75% QOSA option! Link to comment Share on other sites More sharing options...
Andy the Actuary Posted November 22, 2007 Share Posted November 22, 2007 Thank you. Good points. "Relative Values?" is that the piece of paper the we spend so much time preparing but no one reads? The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice. Link to comment Share on other sites More sharing options...
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