Final 411(d)(6) Regs Permit Elimination of QJSA Benefit Option?

[Guest SCUDDESLER]

Assume a pension plan satisfies the QJSA component of the

QJSA/QPSA rules by providing the following benefit forms:

(1) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 50% of the amount of the annuity payable during the joint lives of the participant and spouse (the "normal form of benefit");

(2) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 60% of the amount of the annuity payable during the joint lives of the participant and spouse;

(3) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 70% of the amount of the annuity payable during the joint lives of the participant and spouse; and

(4) a lump sum distribution which is actuarially equivalent to the normal form of benefit.

As I read the final regulations under 411(d)(6) which were

issued last week, the plan could be amended to eliminate,

for example, all benefit options except (1) and not violate

the Code's anticutback rule. Alternatively, the plan could be amended to eliminate (1), (2), and (4), without violating the anticutback rule. Is it true that any combination of optional benefit forms may now be eliminated so long as the plan retains one benefit form that satisfies the QJSA rule?

[Guest dani_o]

I would say that 1, 2 and 3 could be eliminated (as long as the 30-90-8 day rule was still met for participants currently receiving extended pmts...90-day election period). 4, however(act.equiv. LS option,) has to stay. 401(a)(11) has to stay for MOST DC plans(with at least a 50 J&S option unless), unless, of course, the ppt and spouse fulfill the requirements of 417(a). DC plans not subject to 412 funding standards, however, can simply ammend their plans to state that the spouse will receive the ppt's nonforfeitable AB in the event of the ppt's death and then not have to even offer any extended pmt form.