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What Is a Qualified Joint and Survivor Annuity (“QJSA”) and What Effect Does a Qualified Domestic Relations Order Have On It?

Posted by Corey F. Schechter | Nov 03, 2016 | 0 Comments

Contributing Author: Dianne Schechter

Federal law requires “qualified” plans under the Internal Revenue Code to pay retirement benefits in a special payment form unless the benefit plan participant chooses a different form and his or her spouse agrees to the choice in writing.  This special payment form is often called a “qualified joint and survivor annuity” or QJSA payment form.  This benefit is paid to the participant each year and, on the participant's death, a survivor annuity is paid to the surviving spouse.  The survivor annuity or survivor benefit is paid to the participant's surviving spouse for the remainder of his or her life.  Such survivor annuity may vary from 50% to 100% of the benefit the participant was receiving during their lifetime.

Generally, the only way to establish a former spouse's right to a QJSA is through a qualified domestic relations order (known as a “QDRO”).  This means that if a participant and his or her spouse become divorced before the participant's annuity starting date, the divorced spouse loses all right to the survivor benefits that ERISA requires be provided to a participant's spouse, and if the divorced participant remarries, the participant's new spouse may acquire a right to those benefits.  A QDRO, however, may provide that all or a portion of such survivor benefits shall be paid to a former spouse (known as an “alternate payee”) rather than to the person who would otherwise be entitled to receive such death benefits under the plan (typically, the spouse at time of benefit commencement).  Well-drafted QDROs often provide that a former spouse be treated as the participant's current spouse for purposes of the QJSA rules if that is the intent of the parties.

A participant may waive the QJSA no more than ninety (90) days before his annuity starting date.  During this period, a participant may choose a form of payment with no survivor benefit payable (e.g., single sum or life annuity) or a form of payment with survivor benefits payable to the spouse or other beneficiary. A participant may revoke any election until his annuity starting date.  For a QJSA waiver to be valid, however, the participant's spouse must consent to the waiver in writing within the waiver period.

A spouse may give either a “general” or “specific” consent to a QJSA waiver depending on the plan provisions. A general consent permits the participant to waive a QJSA and change the form of payment without further spousal consent. In a specific consent, the spouse consents to a specific form of payment or specific beneficiary. In addition, a spousal consent may be either revocable or irrevocable, as specified in the plan.

For additional information regarding survivor benefits payable under a qualified retirement plan at the time of a participant's death, please contact Corey F. Schechter.

About the Author

Corey F. Schechter

Corey Schechter practices in the areas of Employee Benefits, Employee Stock Ownership Plans, Pension and Profit Sharing Plans, ERISA, ERISA Litigation, Business Law, Qualified Domestic Relations Orders (QDROs), and Employment and Labor Law.


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