Spousal consent

[Guest JMN]

Do the spousal consent rules apply to 403(b) plans? Deceased participant previously designated a nonspouse beneficiary to receive his account balance upon his death. Subsequently, deceased participant married and his surviving spouse did not provide any consent. Does surviving spouse have a right to 50% of the vested balance? There are no QDROs.

[mbozek]

Do the spousal consent rules apply to 403(b) plans? Deceased participant previously designated a nonspouse beneficiary to receive his account balance upon his death. Subsequently, deceased participant married and his surviving spouse did not provide any consent. Does surviving spouse have a right to 50% of the vested balance? There are no QDROs.

If the plan is subject to ERISA spousal consent is required before anther person can be designated as beneficiary. If ERISA plan provides fixed contributions of the money purchase kind where an annuity is the normal form of payment spousal death benefit is 50% of account balance.

If plan is exempt from ERISA the terms of contract will apply unless there a state law, e.g., community property.

[Guest JMN]

Thanks. I have an ERISA-covered 403(b) plan that named another person as beneficiary, but the participant subsequently married and then died. The plan does not provide for an annuity form of payment, so I assume the surviving spouse is entitled to the entire balance (absent a QDRO) because she did not consent to the beneficiary designation.

[mbozek]

Thanks. I have an ERISA-covered 403(b) plan that named another person as beneficiary, but the participant subsequently married and then died. The plan does not provide for an annuity form of payment, so I assume the surviving spouse is entitled to the entire balance (absent a QDRO) because she did not consent to the beneficiary designation.

In an ERISA covered plan the spouse on the date of death is the beneficary of 100% of benefits if spouse did not consent to beneficiary designation.

[Guest JMN]

That is how I read 205, and it does not matter that the designations were already in place when the parties married.

However, I suppose if the plan does not provide for this result (i.e., does not state that the entire benefit is payable to the SS unless he/she properly consents to another beneficiary designation), the exception to the QPSA requirement would not apply and the SS would be entitled to the 50% QPSA. I haven't seen the plan document but assume that it requires spousal consent for other beneficairy designations.

[mbozek]

That is how I read 205, and it does not matter that the designations were already in place when the parties married.

However, I suppose if the plan does not provide for this result (i.e., does not state that the entire benefit is payable to the SS unless he/she properly consents to another beneficiary designation), the exception to the QPSA requirement would not apply and the SS would be entitled to the 50% QPSA. I haven't seen the plan document but assume that it requires spousal consent for other beneficairy designations.

If an ERISA plan does not provide for an annuity as the normal form (i.e. plan is funded with mutual funds) then the surviving spouse benefit is 100% of the account balance. 50% QPSA would be normal benefit form if the plan provided for fixed contirbutons each year and an annuity was the normal form of benefit ( e.g., a 403b plan funded with an annuity contract.)