Spousal QJSA Waiver

[Guest Barney Byrd]

My question concerns the election provided by Internal Revenue Code section 417 to waive a qualified joint and survivor annuity (QJSA).

Section 417(a)(2) says that the spouse must consent to this election. Section 417(a)(2)(B) provides an exception "because there is no spouse, because the spouse cannot be located, or because of such other circumstances as the Secretary may by regulations prescribe."

Where I can find any written guidance that addresses the exception in section 417(a)(2)(B)? Are there any revenue rulings, revenue procedures, notices, court cases, etc., that elaborate on this?

I was asked about this by a plan participant whose employer is in the process of going out of business and terminating their plan. The participant is estranged from her spouse from whom she has lived apart for about 15 years. They are still legally married however. She is being told by the plan administrator that she cannot transfer her plan balance into her IRA without first obtaining a QJSA waiver from her husband.

[Guest PeterGulia]

A plan (if it so provides) may excuse the spouse's consent if the spouse cannot be located. However, at least one court decision held that a plan administrator breaches its fiduciary duty if it relies solely on the participant's statement. Instead, the plan administrator must conduct its own reasonable investigation into whether the spouse cannot be located. Lester v. Regan Equipment Company Profit-sharing Plan & Employee Savings Plan, 1992 WESTLAW 211611 (E.D. Louisiana 1992).

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[Guest Jim K]

Try researching the local abandonment laws in your area for some further guidance.

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