Qualified Joint & Survivor Annuities in Money Purchase Plans
During its qualified joint & survivor annuities (QJSA) project, the Employee Plans Compliance Unit (EPCU) looked at money purchase plan sponsors whose Form 5500-SF showed distributions during the plan year.
EPCU designed the project to determine whether money purchase plan sponsors:
- distributed benefits to married participants as a QJSA, or
- obtained spousal consent before distributing benefits to married participants in a form other than a QJSA, such as a single lump sum.
Most plan sponsors complied with the QJSA notice and consent requirements for plan distributions; however, the EPCU did find some sponsors that didn’t:
- secure spousal consent when the participant waived the QJSA, or
- ensure that a plan representative or notary public witnessed the consent.
EPCU also noted that some plan sponsors weren’t aware that the QJSA notice and consent requirements:
- apply to any waiver of the QJSA,
- apply to direct rollovers and loans, and
- don’t apply to required minimum distributions.
If plan sponsors make distributions from a money purchase pension plan to married participants without obtaining spousal consent, the plan will have operational mistakes that may lead to plan disqualification. Sponsors can fix this failure through the Employee Plans Compliance Resolution System (EPCRS).
Consult with your benefits professional to ensure that you have administrative procedures in place to prevent these operational errors. If you find errors, take prompt action to correct them.
If you have questions about this project, email us and include “QJSA” in the subject line. Make sure to include your telephone number so we can contact you with answers. We regret that we cannot answer technical questions unrelated to your compliance check. If you have account-specific questions, see EP Customer Account Services.
We have many resources to help you keep your retirement plan in compliance. Our resources can help you learn how to fix plan errors and avoid future ones.
- Retirement Topics - Qualified Joint and Survivor Annuity
- Fixing Common Plan Mistakes
- Fix-It Guides
- A Guide to Common Qualified Plan Requirements
- “Maintaining Your Plan” Video
- What You Should Know About Your Retirement Plan (Department of Labor publication)