Spousal Consent - Loans, Hardship Withdrawals, Rollovers, Distributions

I am often asked, outside of a divorce context, whether or not a Participant in a defined contribution plan needs to notify and/or obtain consent from his spouse before: (i) making a loan; (ii) taking a hardship distribution; (iii) rolling over Plan benefits to an IRA or other qualified Plan account; or, (iv) taking a taxable distribution.    

I know how it works with a Federal TSP Plan, but I cannot find a definitive answer or a reference to any applicable statute as it relates to 401(k), profit sharing, 403(b), ESOP, or other form of defined contribution plan, or with respect to an IRA. .  

Much of what I see says that it depends on the Plan documents.   

Any ideas?  

David

16 hours ago, fmsinc said:

Much of what I see says that it depends on the Plan documents

Correct.  The short answer is that if a DC plan meets certain conditions, it does not have to offer an annuity as the normal form of benefit.  In that case, spousal consent is not required for loans or distributions, but it IS required in order to designate someone other than the spouse as the beneficiary.

Plans that do not have to be subject to QJSA rules can still be drafted to be subject to them, so the document still rules.  I know @Larry Starr is a big fan of drafting his documents using QJSA requirement even if they are not required, but I will let him jump in and explain why if he wants to.  

Look at 1.401(a)-20 and 401(a)(11) for more technical information

Thank you.  Just what I needed.  The fog has lifted.  

David

On 2/22/2020 at 4:33 PM, RatherBeGolfing said:

Correct.  The short answer is that if a DC plan meets certain conditions, it does not have to offer an annuity as the normal form of benefit.  In that case, spousal consent is not required for loans or distributions, but it IS required in order to designate someone other than the spouse as the beneficiary.

Plans that do not have to be subject to QJSA rules can still be drafted to be subject to them, so the document still rules.  I know @Larry Starr is a big fan of drafting his documents using QJSA requirement even if they are not required, but I will let him jump in and explain why if he wants to.  

Look at 1.401(a)-20 and 401(a)(11) for more technical information

I agree with the answer; spousal consent needed if the plan provides J&S as the normal form, as I do in my plans.  The quick reason is that, otherwise, you are disinheriting the children of a prior marriage because in order to NOT have the J&S provision, the spouse MUST be the death benefit beneficiary for 100% of the account, instead of just 50% if there are J&S provisions in the plan.

Thank you Larry.