Spousal Consent

[dmb]

A client terminated his DB plan when he reached NRA and rolled the money into a new PS plan. I realize that the J&S feature still applies to the rollover. The PS plan allows for in-svc. distributions (the DB allowed in-svc. distr. at NRA) and my client would like to take advantage of that. If he wanted to take monthly or bi-monthly distributions that were less than $5,000 each, would spousal consent be required?? I think it is, but would like confirmation. Thanks.

[Harwood]

J&S no longer applies if it was a rollover to a new plan [an elective rollover where the money could have been distributed in cash].

Was this an elective rollover or involuntary transfer?

[dmb]

It was an involuntary plan to plan transfer.

[Blinky the 3-eyed Fish]

An important distinction to be sure. As for consent, the question is what is the account balance at the time of distribution, not the distribution amount. So, you are correct in that spousal consent is required.

[Belgarath]

Just for my information, how can you have an involuntary plan to plan transfer when terminating a DB plan? In order to terminate the DB, the participant would have to have had the option to receive the proceeds, or to rollover. Apparently he elected to do a rollover. So I'd say spousal consent is not required. But maybe I'm way off base.

[dmb]

At the time of plan termination the plan only consisted of the owner and his wife.

[Belgarath]

That's fine, but that shouldn't alter the fact that a termination would require a participant option to receive the funds. Is there some "carve out" to this rule that you are aware of that says a plan with husband and wife isn't subject to this requirement? If so, can you provide a citation so I can educate myself further on this issue? Thanks.