failure to obtain spousal consent

[Guest lindamichals]

Would like to know what happens when there is a failure to obtain spousal consent. Plan requires this. Thanks.

[mbozek]

Spouse retains rights to plan benefits, e.g., 50% survivor annuity must be paid to spouse even if lump sum distribution including present value of 50% survivor annuity was paid to employee.

[Harwood]

The EPCRS every year has a section on "Failure to obtain spousal consent"

http://benefitslink.com/IRS/revproc2003-44.pdf

[david rigby]

Hyperlinked version: http://benefitslink.com/IRS/revproc2003-44.shtml

Attaboy Dave!

[Guest lindamichals]

Thanks for the information. However, I am unclear about the participant "repaying back the distribution and receive a QJ&S"

If the participant pays back their distribution, then the only option is a QJ&S? Can anyone shed some light on this? Why wouldn't the other distribution options still be in affect? Thank you.

[E as in ERISA]

The goal is not to give the participants additional time to consider all their options. If a participant fails to get spousal consent at the time of the distribution, then the QJSA is the default -- same as it is in this case. Of course, if the participant does not repay, then they end up keeping the lump sum (or other form) that they originally chose. The plan will just restore the spouse's benefit -- typically 5 to 15% of the participant's balance on average.