Spousal Consent to name a different beneficiary.

[katieinny]

Our client is a small company that employees people of many nationalities. They are setting up a 401(k) plan, but spousal consent has become an issue. Several people left their spouses behind many years ago when they came to America. They were told that in order to name a beneficiary other than their spouses they must get the spouse's consent. These people have said they will refuse to participate in the plan if that is the case. In most cases, they have not had contact with their spouses in several years and probably could not locate them. In some cases, we're not sure if there was a legal marriage.

Does anyone know if there's any relief from the spousal consent requirement under these extenuating circumstances?

[jpod]

There isn't any special relief for these cases. Why would they refuse to participate because of the spousal consent requirement? If it is a vanilla 401(k), there would be no mandatory J&S. So, the only concern which an employee might have is that he/she could die before receiving the full account balance and the beneficiary would be the long, forgotten spouse.

Do these folks understand that this would be the only consequence of the spousal consent requirement?

[katieinny]

Yes, we (and they) understand that spousal consent is not required for distributions from this plan. Only for naming a beneficiary other than the spouse.

Remember, many of these people come from different backgrounds and life experiences. Life expectancies in their native countries might be shorter -- and dying from something other than old age a more common occurrence. So when you tell them they can't name their children, brothers or sisters as their beneficiaries they get upset.

[RTK]

IRC and ERISA provide that spousal consent is not required if it is established to plan representative's satisfaction that there is no spouse, that spouse cannot be located, or that such other conditions exist that may be presecribed by IRS regs.

I have never seen any other guidance (case, reg, notice, etc) on this provision or what documentation or evidence would be required to establish no spouse or a missing spouse. I encountered this recently with a missing spouse in Thailand, but the participant's father was going to Thailand to look for the spouse. The Plan has put on the decision on this issue on hold until father's return. In that case, if the spouse is not found, I am thinking of securing affidavits from the participant and father regarding steps taken to locate spouse. I may also require a PBGC type commerical missing participant/spouse search.