Spousal Consent

[30Rock]

Can an ERISA 401k plan that is not subject to QJSA requirements require spousal consent on normal distributions when a married participant terminates employment? I have seen spousal consent for plan loans and hardships, but do not see how it can work for distributions on termination of employment. Essentially the spouse could prohibit any distribution until RMD's become payable.

Thanks!

[ETA Consulting LLC]

The easy answer is to follow the terms of the plan. I'd doubt any written language within the Plan's document would require spousal consent; leaving this an arbitrary decision by the plan administrator. The limit to spousal involvment, in my view, would be to consenting to allowing the participant designate someone other than the spouse as beneficiary.

Then challenge then becomes a claim by the participant that the sponsor is failing to enforce their rights to distribution under the written terms of the plan.

Good Luck!

[austin3515]

I had a plan that simply required spousal consent to any distribution. I assume it was legal because they had a favorable opinion letter. But it was pretty simple, it didn't involve QJSA or anything. Document just said "spousal consent shall be required before approving any distribtuion" or something like that.

[Bird]

Requiring spousal consent on a form when it is not required by the terms of the plan (and should not be required if not an annuity plan) is a violation of the participant's ERISA rights, IMO. I've seen it - un-knowledgeable attorneys think they are erring on the side of caution by including it on the forms.

I had a plan that simply required spousal consent to any distribution. I assume it was legal because they had a favorable opinion letter. But it was pretty simple, it didn't involve QJSA or anything. Document just said "spousal consent shall be required before approving any distribtuion" or something like that.

Just because it had an FDL doesn't mean they read that. Maybe it's ok though.

[austin3515]

I agree with you 100% regarding when the doc does not require. Point of clarification though, my document did require it.

[masteff]

I agree with you 100% regarding when the doc does not require. Point of clarification though, my document did require it.

My understanding is the code and regs set threshholds but the plan document can go beyond those unless the code and regs otherwise require (including but not limited to discrimination testing). Example: I had a plan that required hardship for withdrawals of company matching contributions; in audit, the Service only cared whether or not we complied w/ the plan provisions.