Qualified Optional Survivor Annuity

[Dougsbpc]

We inherited a DB plan that has a 100% J&S Normal Form of Benefit for married participants and single life for unmarried.

For terminated participants, must we provide the Qualified Optional Survivor Annuity? I would think not since the normal form is 100% J &S.

[Andy the Actuary]

We inherited a DB plan that has a 100% J&S Normal Form of Benefit for married participants and single life for unmarried.

For terminated participants, must we provide the Qualified Optional Survivor Annuity? I would think not since the normal form is 100% J &S.

Wouldn't you need to provide a J&75% unless the Plan already provides an optional J&50%?

[My 2 cents]

I think that the QOSA for a plan with a 100% contingent annuitant QJSA is a 50% contingent annuitant form (with spouse as contingent). So the plan has to permit married participants to elect that form. Participants wanting a larger monthly benefit (the 50% form, if the normal form is really a 100% contingent form, would necessarily have to be a larger monthly benefit, with an actuarial adjustment factor somewhere around 107% to 110%) have to be given the opportunity to elect to do so, just as plans with a 50% QJSA have to allow participants to elect a form with a larger survivor benefit. It is my understanding of the spousal consent rules that spousal consent would not be needed to go from a contingent 100% QJSA to a 50% QOSA or from a 50% QJSA to a 75% QOSA, since all such forms meet ERISA's definition of a Qualified Joint and Survivor Annuity (and would thus be exempt from spousal consent requirements).

[Andy the Actuary]

It is my understanding of the spousal consent rules that spousal consent would not be needed to go from a contingent 100% QJSA to a 50% QOSA or from a 50% QJSA to a 75% QOSA, since all such forms meet ERISA's definition of a Qualified Joint and Survivor Annuity (and would thus be exempt from spousal consent requirements).

(Unless the Plan required)