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QJSA Waiver


Guest Barney Byrd
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Guest Barney Byrd

My question concerns the election provided by Internal Revenue Code section 417 to waive a qualified joint and survivor annuity (QJSA).

Section 417(a)(2) says that the spouse must consent to this election. Section 417(a)(2)(B) provides an exception "because there is no spouse, because the spouse cannot be located, or because of such other circumstances as the Secretary may by regulations prescribe."

Where I can find any written guidance that addresses the exception in section 417(a)(2)(B)? Are there any revenue rulings, revenue procedures, notices, court cases, etc., that elaborate on this?

I was asked about this by a plan participant whose employer is in the process of going out of business and terminating their plan. The participant is estranged from her spouse from whom she has lived apart for about 15 years. They are still legally married however. She is being told by the plan administrator that she cannot transfer her plan balance into her IRA without first obtaining a QJSA waiver from her husband.

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See question 27 of Reg. ss 1.401(a)-20.

As I understand the rules, your client is out of luck, and will need to get spousal consent, a divorce, or must show that "the participant is legally separated or the participant has been abandoned (within the meaning of local law) and the participant has a court order to such effect..."

Don't ask me what the clause in quotes means - probably a matter of local law - and it's not clear whether the court order is required for the legal separation (it's difficult to base one's interpretation on the absence of a comma).

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I'm not an attorney, but I have always thought of the clause in quotes (in the Dowist message) as a sort of definition of "legally separated". That is, a married couple does not need a judge or court to get a separation; they can execute their own document. Becaues a divorce requries a court, the IRS reg is requiring a court to define a separation.

Does that help?

[This message has been edited by pax (edited 06-24-99).]

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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