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force out distributions with QJSA provisions


K2retire

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I recall pre-EGTRRA when we had more money purchase pension plans, that terminating plans making distributions of balances over $5,000 were required to buy an annuity if the spouse did not consent to the distribution. I'm working on a 401(k) plan termination that includes some old MPPP balances and calls for QJSAs. I am being told that the plan sponsor can pay those balances to an IRA without regard to the QJSA provisions because the plan is terminating. Has that rule changed?

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Nope. You are right on. Presumably the plan document will also have language specifying this. I'm assuming that this was a MP plan that merged into a 401(k) plan, rather than terminating with actual rollovers/elective transfers to the 401(k)?

Normally a sposue won't refuse to sign a waiver except where a divorce is in progress, or perhaps contemplated...

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Do you have a current address? If so, I'd assume the waiver can be signed in front of a Notary rather than a plan representative? Or are they just lost or "unresponsive?" If the latter, sometimes you can have some luck threatening to pay them the annuity if they don't make an election. When you quote an annuity payment of $17.00 per month, rather than the lump sum, sometimes they get off their duffs.

To climb back on my soapbox, this is a problem all out of proportion to what it should be. After one certified letter, we should be able to forward the $$$ to the PBGC and be done with it!!! I keep hoping for legislation/regulation that will get us there.

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...the waiver can be signed in front of a Notary rather than a plan representative...

...depending on what the plan says.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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