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Naming a non-spouse as beneficiary as part of J&S


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Can a non spouse be named as a beneficiary as a part of a joint and survivor annuity (if the participant is still actively working, if the participant separated from services, if the plan is under termination, etc.....)?

Any related information will be highly appreciated.

 

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I think a "Qualified" Joint & Survivor Annuity must be over the lives of the Participant and Spouse.  Typically, if the participant is not married, the annuity will be paid out over a single life.  When dealing with nonqualified annuities (outside of qualified plans), you may have any joint annuitant.  The qualified plan rules require some degree of spousal protection.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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I agree, the spouse must be the bene in a QJSA.  But it's not clear to me exactly what you are asking.  A non-spouse can certainly be named as beneficiary before benefits are in pay status; there might be a lump-sum death benefit.  It might be possible to elect a different kind of annuity, say straight (single) life with 10 years (or 15, or 20) certain payments.  If they are not offered by the plan but a lump sum is, the participant could roll the lump sum and buy an annuity that has the desired payout.

Ed Snyder

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Assuming a qualified DB plan, both the required pre-retirement death benefit and the retirement benefit must have the spouse as beneficiary unless a) the spouse signs the appropriate waiver and b) the plan allows another beneficiary for the benefit in question.

If there is no spouse or the spouse agrees to the waiver, another beneficiary can be named if the plan permits it.

*If there is someone entitled to a benefit due to a QDRO, that could override the above.

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The required QJSA is only for surviving spouse. Plan document may include other annuity options that would permit nonspouse beneficiary. These would typically not be subsidized (if they were you would need to include the subsidy in 415(b) testing). Of course, spouse would need to be nonexistent or consent to one of these forms of annuity.

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  • 2 years later...

Along these lines, regarding a non-spouse beneficiary for J&S benefit - in this case, the spouse is deceased and the participant wants to elect a J&S with a a 50/50 split of two children as beneficiaries.  If it is even permissible, it can't be common.   Any thoughts would be appreciated.  Thank you.

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7 minutes ago, CLE Pension said:

Along these lines, regarding a non-spouse beneficiary for J&S benefit - in this case, the spouse is deceased and the participant wants to elect a J&S with a a 50/50 split of two children as beneficiaries.  If it is even permissible, it can't be common.   Any thoughts would be appreciated.  Thank you.

What does the plan document say?  Typically it will say the normal form of benefit for an unmarried participant is a life annuity.  For married participants there will be QJSA options with the spouse (subsidized or not), maybe a lump sum, maybe installments, and RMD provisions.  The participant cannot elect what the plan does not offer.  

  • Like 1

I carry stuff uphill for others who get all the glory.

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1 minute ago, shERPA said:

What does the plan document say?  Typically it will say the normal form of benefit for an unmarried participant is a life annuity.  For married participants there will be QJSA options with the spouse (subsidized or not), maybe a lump sum, maybe installments, and RMD provisions.  The participant cannot elect what the plan does not offer.  

The normal form for an unmarried participant is life annuity, so I presume a QJSA with a non-spouse beneficiary is not an option?

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33 minutes ago, CLE Pension said:

The normal form for an unmarried participant is life annuity, so I presume a QJSA with a non-spouse beneficiary is not an option?

That's how I read it.

I carry stuff uphill for others who get all the glory.

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Normal form is one thing; available options is another.  Check to see what options are permitted in the plan.  I've seen dozens of plans that do not contain any optional form that would permit what you are asking, and (perhaps) 3 or 4 plans that do contain that option.

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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Thank you all.   I will check the 401a9 rules, which may be at play here.

The official option in the plan document is Contingent Annuity, not Joint and Survivor Annuity, so wondering if that changes anything.  It seems to operate in the same fashion as J&S the way it is written.

Contingent Annuity - A Contingent Annuity provides a reduced amount of monthly income for the life of the Participant and, in the event of his or her death, an amount of monthly income equal to 50%, 66 2/3%, or 100% thereof as elected by the Participant for the life of his or her Beneficiary.

 

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