Terminating Plan - One participant cannot obtain spousal consent

We are terminating a PBGC covered plan and the distribution deadline is approaching. One participant cannot obtain spousal consent for the lump sum distribution because his wife refuses to sign the consent form so we will have to purchase an annuity. I've never needed to purchase an annuity for 1 person. The companies that we work with on annuity purchases have limits and he has a very small benefit. Any ideas?

There are brokers who can help - I will PM you.  You can also go direct to the carriers.  Did you try Midland and/or Mutual of Omaha?  They will usually quote.  I will send you a few options via PM for brokers who might be able to help.

Thirty+ years ago, I was terminating a plan and had a similar situation, and the EE was only about age 40.  The LS was small, only about $4K.  Insurance companies did not want to sell a deferred annuity that small (or at all).  Thus, the only alternative was an immediate J&S annuity, with a corresponding small monthly amount.  We described this to the participant, something like, "you can get $4,000 now or you can get a 50%J&S of $16 per month" (don't do the math, it's just an example).  Upon hearing the alternatives, the participant (and spouse) decided to elect the LS.  The original questioner might get similar "simplification" by sharing some numbers with the participant.

Consider:

Alfonso Gomar alfonso.gomar@dietrichannuity.com (610) 279-9455

https://www.dietrichannuity.com/contact-us/

https://www.dietrichannuity.com/group-annuity-products/pension-plan-terminations/

Try MetLife.  They set up annuities for TSP plan participants. See attached.TSP Annuities MetLife.pdf

The language on the PBGC website states: "A rollover of an amount exceeding a plan's de minimis cash-out level is subject to spousal consent regardless of whether the participant wants the lump sum to be rolled over into another plan or IRA or paid directly by check or direct deposit." 

One would expect that the purchase of an annuity would also require spousal consent.  See 29 CFR 4022.8(c)(3) at  - https://www.law.cornell.edu/cfr/text/29/4022.8

What happens if the Participant in your case cannot get his wife to consent?   

He can always file for divorce and transfer her share via a QDRO  

David