QPSA Election

[Guest RPA123]

Hello,

Can anyone tell me if a defined benefit plan MUST offer the surviving spouse the ability to defer commencement of the QPSA past earliest retirement age? That is, say, if she did not want to begin receiving it at the participant's age 55, ERA.

Thanks.

[Everett Moreland]

417(e)(1):

"A plan may provide that the present value of a qualified joint and survivor annuity or a qualified preretirement survivor annuity will be immediately distributed if such value does not exceed the amount that can be distributed without the participant's consent under section 411(a)(11)."

1.417(e)-1(b)(1):

"No consent of the participant or spouse is needed for distribution of a QJSA or QPSA after the benefit is no longer immediately distributable (after the participant attains (or would have attained if not dead) the later of normal retirement age (as defined in section 411(a)(8)) or age 62)."

IRM 4.72.9.3.7(3) (04-01-2006):

"Determine, by looking at the consent forms of the participant and spouse, that any distribution made while the benefit is immediately distributable has the consent of the participant or the surviving spouse and is in the form of a QJSA or QPSA."

[Guest RPA123]

OK! But, it is still not clear to me in layman's words, at what point in time can the spouse make the election to defer commencement of benefits? Also, can the plan require that it MUST begin at ERA, or anywhere between ERA and NRA?

Your help would greatly be appreciated! Thanks.

[Everett Moreland]

The plan must obtain the surviving spouse's consent to start the QPSA before the later of normal retirement age and age 62, unless the QPSA'a present value is $5,000 or less. A plan may impose more stringent consent requirements, but I've not seen a plan that does. So, answering your questions:

1. The surviving spouse does not elect to defer; the default is deferral to the later of normal retirement age and age 62. The surviving spouse may consent to receive it before then, such as at early retirement age.

2. The plan cannot require the surviving spouse to receive it before normal retirement age.