26 USC 417 - Definitions and special rules for purposes of minimum survivor annuity requirements

U.S Code last checked for updates: May 06, 2024

§ 417.

Definitions and special rules for purposes of minimum survivor annuity requirements

(a)

Election to waive qualified joint and survivor annuity or qualified preretirement survivor annuity

(1)

In general

A plan meets the requirements of section 401(a)(11) only if—

(A)

under the plan, each participant—

(i)

may elect at any time during the applicable election period to waive the qualified joint and survivor annuity form of benefit or the qualified preretirement survivor annuity form of benefit (or both),

(ii)

if the participant elects a waiver under clause (i), may elect the qualified optional survivor annuity at any time during the applicable election period, and

(iii)

may revoke any such election at any time during the applicable election period, and

(B)

the plan meets the requirements of paragraphs (2), (3), and (4) of this subsection.

(2)

Spouse must consent to election

Each plan shall provide that an election under paragraph (1)(A)(i) shall not take effect unless—

(A)

(i)

the spouse of the participant consents in writing to such election, (ii) such election designates a beneficiary (or a form of benefits) which may not be changed without spousal consent (or the consent of the spouse expressly permits designations by the participant without any requirement of further consent by the spouse), and (iii) the spouse’s consent acknowledges the effect of such election and is witnessed by a plan representative or a notary public, or

(B)

it is established to the satisfaction of a plan representative that the consent required under subparagraph (A) may not be obtained because there is no spouse, because the spouse cannot be located, or because of such other circumstances as the Secretary may by regulations prescribe.

Any consent by a spouse (or establishment that the consent of a spouse may not be obtained) under the preceding sentence shall be effective only with respect to such spouse.

(3)

(A)

Explanation of joint and survivor annuity

Each plan shall provide to each participant, within a reasonable period of time before the annuity starting date (and consistent with such regulations as the Secretary may prescribe), a written explanation of—

(i)

the terms and conditions of the qualified joint and survivor annuity and of the qualified optional survivor annuity,

(ii)

the participant’s right to make, and the effect of, an election under paragraph (1) to waive the joint and survivor annuity form of benefit,

(iii)

the rights of the participant’s spouse under paragraph (2), and

(iv)

the right to make, and the effect of, a revocation of an election under paragraph (1).

(B)

Explanation of qualified preretirement survivor annuity

(i)

In general

(ii)

Applicable period

For purposes of clause (i), the term “applicable period” means, with respect to a participant, whichever of the following periods ends last:

(I)

The period beginning with the first day of the plan year in which the participant attains age 32 and ending with the close of the plan year preceding the plan year in which the participant attains age 35.

(II)

A reasonable period after the individual becomes a participant.

(III)

A reasonable period ending after paragraph (5) ceases to apply to the participant.

(IV)

A reasonable period ending after section 401(a)(11) applies to the participant.

In the case of a participant who separates from service before attaining age 35, the applicable period shall be a reasonable period after separation.

(4)

Requirement of spousal consent for using plan assets as security for loans

Each plan shall provide that, if section 401(a)(11) applies to a participant when part or all of the participant’s accrued benefit is to be used as security for a loan, no portion of the participant’s accrued benefit may be used as security for such loan unless—

(A)

the spouse of the participant (if any) consents in writing to such use during the 90-day period ending on the date on which the loan is to be so secured, and

(B)

requirements comparable to the requirements of paragraph (2) are met with respect to such consent.

(5)

Special rules where plan fully subsidizes costs

(A)

In general

(B)

Definition

(6)

Applicable election period defined

For purposes of this subsection, the term “applicable election period” means—

(A)

in the case of an election to waive the qualified joint and survivor annuity form of benefit, the 180-day period ending on the annuity starting date, or

(B)

in the case of an election to waive the qualified preretirement survivor annuity, the period which begins on the first day of the plan year in which the participant attains age 35 and ends on the date of the participant’s death.

In the case of a participant who is separated from service, the applicable election period under subparagraph (B) with respect to benefits accrued before the date of such separation from service shall not begin later than such date.

(7)

Special rules relating to time for written explanation

Notwithstanding any other provision of this subsection—

(A)

Explanation may be provided after annuity starting date

(i)

In general

(ii)

Regulatory authority

(B)

Waiver of 30-day period

(b)

Definition of qualified joint and survivor annuity

For purposes of this section and section 401(a)(11), the term “qualified joint and survivor annuity” means an annuity—

(1)

for the life of the participant with a survivor annuity for the life of the spouse which is not less than 50 percent of (and is not greater than 100 percent of) the amount of the annuity which is payable during the joint lives of the participant and the spouse, and

(2)

which is the actuarial equivalent of a single annuity for the life of the participant.

Such term also includes any annuity in a form having the effect of an annuity described in the preceding sentence.

(c)

Definition of qualified preretirement survivor annuity

For purposes of this section and section 401(a)(11)—

(1)

In general

Except as provided in paragraph (2), the term “qualified preretirement survivor annuity” means a survivor annuity for the life of the surviving spouse of the participant if—

(A)

the payments to the surviving spouse under such annuity are not less than the amounts which would be payable as a survivor annuity under the qualified joint and survivor annuity under the plan (or the actuarial equivalent thereof) if—

(i)

in the case of a participant who dies after the date on which the participant attained the earliest retirement age, such participant had retired with an immediate qualified joint and survivor annuity on the day before the participant’s date of death, or

(ii)

in the case of a participant who dies on or before the date on which the participant would have attained the earliest retirement age, such participant had—

(I)

separated from service on the date of death,

(II)

survived to the earliest retirement age,

(III)

retired with an immediate qualified joint and survivor annuity at the earliest retirement age, and

(IV)

died on the day after the day on which such participant would have attained the earliest retirement age, and

(B)

under the plan, the earliest period for which the surviving spouse may receive a payment under such annuity is not later than the month in which the participant would have attained the earliest retirement age under the plan.

In the case of an individual who separated from service before the date of such individual’s death, subparagraph (A)(ii)(I) shall not apply.

(2)

Special rule for defined contribution plans

(3)

Security interests taken into account

(d)

Survivor annuities need not be provided if participant and spouse married less than 1 year

(1)

In general

Except as provided in paragraph (2), a plan shall not be treated as failing to meet the requirements of section 401(a)(11) merely because the plan provides that a qualified joint and survivor annuity (or a qualified preretirement survivor annuity) will not be provided unless the participant and spouse had been married throughout the 1-year period ending on the earlier of—

(A)

the participant’s annuity starting date, or

(B)

the date of the participant’s death.

(2)

Treatment of certain marriages within 1 year of annuity starting date for purposes of qualified joint and survivor annuities

For purposes of paragraph (1), if—

(A)

a participant marries within 1 year before the annuity starting date, and

(B)

the participant and the participant’s spouse in such marriage have been married for at least a 1-year period ending on or before the date of the participant’s death,

such participant and such spouse shall be treated as having been married throughout the 1-year period ending on the participant’s annuity starting date.

(e)

Restrictions on cash-outs

(1)

Plan may require distribution if present value not in excess of dollar limit

(2)

Plan may distribute benefit in excess of dollar limit only with consent

If—

(A)

the present value of the qualified joint and survivor annuity or the qualified preretirement survivor annuity exceeds the amount that can be distributed without the participant’s consent under section 411(a)(11), and

(B)

the participant and the spouse of the participant (or where the participant has died, the surviving spouse) consent in writing to the distribution,

the plan may immediately distribute the present value of such annuity.

(3)

Determination of present value

(A)

In general

(B)

Applicable mortality table

(C)

Applicable interest rate

(D)

Applicable segment rates

(f)

Other definitions and special rules

For purposes of this section and section 401(a)(11)—

(1)

Vested participant

(2)

Annuity starting date

(A)

In general

The term “annuity starting date” means—

(i)

the first day of the first period for which an amount is payable as an annuity, or

(ii)

in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the participant to such benefit.

(B)

Special rule for disability benefits

(3)

Earliest retirement age

(4)

Plan may take into account increased costs

(5)

Distributions by reason of security interests

(6)

Requirements for certain spousal consents

(7)

Consultation with the Secretary of Labor

(g)

Definition of qualified optional survivor annuity

(1)

In general

For purposes of this section, the term “qualified optional survivor annuity” means an annuity—

(A)

for the life of the participant with a survivor annuity for the life of the spouse which is equal to the applicable percentage of the amount of the annuity which is payable during the joint lives of the participant and the spouse, and

(B)

which is the actuarial equivalent of a single annuity for the life of the participant.

Such term also includes any annuity in a form having the effect of an annuity described in the preceding sentence.

(2)

Applicable percentage

(A)

In general

For purposes of paragraph (1), if the survivor annuity percentage—

(i)

is less than 75 percent, the applicable percentage is 75 percent, and

(ii)

is greater than or equal to 75 percent, the applicable percentage is 50 percent.

(B)

Survivor annuity percentage

(Added Pub. L. 98–397, title II, § 203(b), Aug. 23, 1984, 98 Stat. 1441; amended Pub. L. 99–514, title XI, § 1139(b), title XVIII, § 1898(b)(1)(A), (4)(A), (5)(A), (6)(A), (8)(A), (9)(A), (10)(A), (11)(A), (12)(A), (15)(A), (B), Oct. 22, 1986, 100 Stat. 2487, 2944, 2945, 2947–2951; Pub. L. 100–647, title I, § 1018(u)(9), Nov. 10, 1988, 102 Stat. 3590; Pub. L. 101–239, title VII, § 7862(d)(1)(A), Dec. 19, 1989, 103 Stat. 2433; Pub. L. 103–465, title VII, § 767(a)(2), Dec. 8, 1994, 108 Stat. 5038; Pub. L. 104–188, title I, § 1451(a), Aug. 20, 1996, 110 Stat. 1815; Pub. L. 105–34, title X, § 1071(a)(2), Aug. 5, 1997, 111 Stat. 948; Pub. L. 107–147, title IV, § 411(r)(1), Mar. 9, 2002, 116 Stat. 51; Pub. L. 109–280, title III, § 302(b), title X, § 1004(a), title XI, § 1102(a)(1)(A), Aug. 17, 2006, 120 Stat. 920, 1053, 1056; Pub. L. 110–458, title I, § 103(b)(2)(A), Dec. 23, 2008, 122 Stat. 5103; Pub. L. 112–141, div. D, title II, § 40211(a)(2)(C), July 6, 2012, 126 Stat. 847; Pub. L. 113–295, div. A, title II, § 221(a)(57)(B)(i), Dec. 19, 2014, 128 Stat. 4046.)

cite as: 26 USC 417