Internl Revenue Service Issues Sample Language for Sposal Waiver of Qualified Joint and Survivor Annuity

From Employee Benefits Alert

February 1997

Earlier this month, the IRS issued a notice providing sample language designed to make it easier for spouses of qualified plan participants to understand their rights to survivor annuities under qualified plans. The sample language provides explanations of the spousal rights in question and answer format. The notice includes four models which are intended to be used in the following circumstances:

• Spousal consent to a waiver of a qualified joint and survivor annuity ("QJSA") under a defined benefit plan or a defined contribution plan.
• Spousal consent to a waiver by a participant in a defined benefit plan of a qualified preretirement survivor annuity ("QPSA") and selection by the participant of a beneficiary other than the spouse to receive a survivor benefit.
• Spousal consent to a waiver by a participant in a defined contribution plan of a QPSA and selection by the participant of a beneficiary other than the spouse to receive a survivor benefit.
• Spousal consent to the selection by a participant in a defined contribution plan of a beneficiary other than the spouse for a participant's account balance.

The sample language in intended to be incorporated in the spousal consent form. It is much more comprehensive than the language currently used by most plan sponsors. Although the IRS stated that plan administrators are not required to use the sample language, they are encouraged to do so to protect against claims that a spouse's consent was not fully informed. The sample language must be conformed to each plan depending upon the terms of the plan.

If you would like a copy of the sample language or to have us review your current spousal consent forms to incorporate the sample language, please call either Kirk H. O'Ferrall or Paul J. Powers, Jr. at (212) 818-9200.