Money purchase plan

[Guest JM123]

Does the requirement to explain the "financial effect" of the QJSA require specifying actuarial assumptions and/or an annuity quote from an annuity provider? Or is it permissible to simply state that the account will be used to buy an annuity from an insurance company?

[Mike Preston]

It would be administratively burdensome to require a specific annuity quote when explaining the QJSA. We "estimate" it and then explain that the actual amount of the annuity will depend on the insurance company's assumptions. But it has been a long time since we actually dealt with a pure money purchase plan. Most of the time we are now dealing with money purchase monies within profit sharing plans.

[QDROphile]

The regulations provide detail on the explanation that is required. It is not sufficient to say that the account balance will be used purchase an annuity.

[Guest JM123]

Thanks to you both.