Is it possible to have an account distributed while waiting for divorce proceedings to start

[Guest jkrad]

A participant has been separated for eight years (PA) and is looking to receive a distribution from her PSP account. The account has psp & prior money purchase pension plan assets in this account. We sent to her a spousal consent form to be signed if she were married. She indicated to me that formal divorce proceedings have not started because there is disagreement by parties on the allocation of the property. I asked the participant if her account is listed as part of the property and she indicated yes.

Could someone please let me know if I was correct in stating to the participant that until the proceedings have taken place and the property is split she is not entitled to a distribution of her account unless the spouse consents and signs the spousal consent form?

[Belgarath]

I would absolutely get a legal opinion on this one.

My own personal recollection is that if there is a court order that the participant is legally separated, then no consent is required. But please consider this an uninformed opinion - this is just my memory of something I read from a secondary source. Probably some of the legal experts here will chime in with some better opinions.

[david rigby]

Perhaps IRS reg. 1.401(a)-20, Q&A 27 is relevant.

Look at the plan provisions also.

[GBurns]

Regardless of what the IRS might or might not say, there remains what the PD says.

At this time, there is no divorce proceeding, therefore she is still married although separated. That there would be listing of property and disagreements over splitting of property bfeore the start of divorce proceedings is questionable.

I do not remember ever seing a PD that made a provision for separations, whether legal or not. So if the PD makes no mention of separation, you are left with what the PD says regarding married participants whose spouses are known.

The PD rules until there is notice of the formal proceedings, although I have heard of a Notice of Intent.

As suggested a lawyer should be in order.