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AdKu

QPSA - participants' notice

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In IRS 417(c) - QPSA - Spousal Benefit it is stated:

"A qualified plan, like a defined benefit plan, money purchase plan or target benefit plan, must provide a QPSA to all married participants unless the participant and spouse consent in writing to waive the QPSA."

"it must give a participant a QPSA notice during the period beginning when he or she is age 32 and ending with the close of the plan year before the participant is age 35,or within one year from when an employee becomes a plan participant if he or she is hired after age 35."

Is this practically true that as practitioners we must provide the QPSA notice for all affected participants of all the DB/Money Purchase/Target Benefit Plans that we administer within the applicable QPSA election period as stated in the code?

 

Does it mean the surviving spouse will receive a lump sum instead of annuity if a participant/spouse consented to waive QPSA in writing and the two were married more than 1 year when the annuitant/the participant died before retirement?

 

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23 minutes ago, AdKu said:

"it must give a participant a QPSA notice during the period beginning when he or she is age 32 and ending with the close of the plan year before the participant is age 35,or within one year from when an employee becomes a plan participant if he or she is hired after age 35."

This is on our checklist.  Whether we pay close attention is another matter...I'm probably most guilty of ignoring it.

24 minutes ago, AdKu said:

Is this practically true that as practitioners we must provide the QPSA notice for all affected participants of all the DB/Money Purchase/Target Benefit Plans that we administer within the applicable QPSA election period as stated in the code?

Yes.  Well, it is the Plan  Administrator's duty, not ours, but practically, we're the ones checking.

26 minutes ago, AdKu said:

Does it mean the surviving spouse will receive a lump sum instead of annuity if a participant/spouse consented to waive QPSA in writing and the two were married more than 1 year when the annuitant/the participant died before retirement?

It's generally more about the beneficiary - participant waives QPSA by naming someone else and spouse consents - but yes, I think if you read your plan language carefully the participant really should waive the PRSA while living if they want the spouse to be able to take a lump sum.

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