Spousal Consent for Loan from NON-QJSA Plan ?

[Guest halka]

I've searched but have not found a conclusive cite. Plan is NON-QJSA, employer/plan is headquartered in common law state but has participants in community property state (CA). Does the sole fact that a participant lives in a community property state require spousal consent for a participant loan ?? Assume the loan is for 50% of vested balance (and greater than $5k). I assume ERISA preemption controls, but I've not found any concrete statement.

THANKS

[Guest FormsRmylife]

We have taken the position (and have had IRS document reviewers buy it) that a PSP must require spousal consent for loans over $5,000, because the loan reduces the death benefit payable during the term of the loan. Since under a PSP (that has been designed to avoid teh main QJSA rules) 100% of the account must be paid as a death benefit to the spouse unless waived, the spouse has an interest in whether the loan should be granted.

[Guest ActuaryWannabe]

Just for the record though, from the ERISA Outline Book:

Spousal consent. If the plan is subject to the QJSA rules, spousal consent must be

obtained on the use of any portion of the participant's accrued benefit as collateral. IRC

§417(a)(4)/ERISA §205©(4). See Chapter 6, Section III, for rules relating to when a plan is

subject to the QJSA rules. If the plan is not subject to the QJSA rules, the participant may

consent to the use of his or her accrued benefit as collateral without obtaining spousal consent.

[mbozek]

Community property laws are preempted by ERISA.