10.4 QJSA and QPSA Survivor Annuity Rules, the DC Plan Exemption & Spousal Consent Administration
Key Takeaways
- IRC §401(a)(11) and §417 require a Qualified Joint and Survivor Annuity and a Qualified Pre-Retirement Survivor Annuity in defined benefit and money purchase plans; the survivor portion of a QJSA must be between 50% and 100% of the joint-life amount.
- A profit-sharing or 401(k) plan is exempt from the QJSA/QPSA rules only if it meets all three conditions of IRC §401(a)(11)(B)(iii): the spouse is the automatic 100% death beneficiary, the plan offers no life annuity option, and the plan is not a transferee of assets from a plan subject to the rules.
- Spousal consent must be in writing, must acknowledge the specific non-spouse beneficiary or optional form, and must be witnessed by a plan representative or a notary public; a general or blanket consent is invalid.
- The QJSA explanation must be provided between 30 and 180 days before the annuity starting date, and a participant may waive the 30-day window down to 7 days if the plan permits.
Why a 401(k) Administrator Needs the Annuity Rules
Most 401(k) plans never pay a QJSA. That is precisely why the topic is tested: the candidate must know why the plan is exempt, and must recognize the fact patterns where the exemption fails and a lump sum paid to a participant without spousal consent becomes an operational failure.
The rules come from the Retirement Equity Act of 1984 (REA), which added IRC §401(a)(11) and IRC §417 to protect surviving spouses from a participant unilaterally electing a single-life benefit or naming someone else as beneficiary.
The Two Protected Forms
Qualified Joint and Survivor Annuity (QJSA)
An annuity for the life of the participant with a survivor annuity for the life of the spouse that is:
- Not less than 50% and not more than 100% of the amount payable during the participant's and spouse's joint lives; and
- The actuarial equivalent of a single life annuity for the participant's life.
A plan subject to the rules must also offer a Qualified Optional Survivor Annuity (QOSA). Under the Pension Protection Act of 2006, if the plan's QJSA survivor percentage is less than 75%, the QOSA must be 75%; if the QJSA is 75% or more, the QOSA must be 50%.
Qualified Pre-Retirement Survivor Annuity (QPSA)
A survivor annuity payable to the surviving spouse of a vested participant who dies before the annuity starting date. In a defined contribution plan subject to the rules, the QPSA must be purchasable with at least 50% of the participant's vested account balance.
The Defined Contribution Exemption — IRC §401(a)(11)(B)(iii)
A profit-sharing or stock bonus plan (including a 401(k)) is exempt from both QJSA and QPSA only if all three of the following are true:
- The participant's vested balance is payable in full, on death, to the surviving spouse — unless the spouse has consented to a different beneficiary; and
- The plan does not offer a life annuity as an optional form of benefit; and
- The plan is not a direct or indirect transferee of assets from a plan that was subject to the QJSA/QPSA rules (a money purchase or defined benefit plan).
All three. Miss any one and the plan is subject to the annuity rules for the affected amounts.
| Plan type | Subject to QJSA/QPSA? |
|---|---|
| Defined benefit | Yes, always |
| Money purchase pension | Yes, always — this is a pension plan |
| Target benefit | Yes |
| 401(k)/profit sharing meeting all three exemption conditions | No |
| 401(k) that offers a life annuity distribution option | Yes |
| 401(k) that accepted a merger of a terminated money purchase plan | Yes, as to the transferred assets (and often the whole account, depending on tracking) |
| ESOP | Generally exempt on the same three-condition basis |
The transferee trap. Meadowbrook Clinic terminated its money purchase plan in 2019 and merged the assets into its 401(k). The 401(k) document says nothing about annuities. In 2026 a participant with a merged money purchase source requests a lump sum and names his brother as beneficiary. Because the 401(k) is a transferee plan, the transferred money purchase amounts remain subject to QJSA/QPSA. A lump sum paid without a properly witnessed spousal consent and without the QJSA explanation is an operational failure. Well-run plans track transferred money purchase amounts in a separate source precisely so the annuity rules can be applied only where required.
Spousal Consent: The Mechanics That Get Missed
Even in an exempt 401(k), spousal consent is required to name a non-spouse beneficiary, because the exemption is conditioned on the spouse being the automatic death beneficiary. The requirements under IRC §417(a)(2) are strict and are tested with precision:
| Requirement | Detail |
|---|---|
| Written | Oral consent is never sufficient. |
| Specific | It must acknowledge the specific non-spouse beneficiary (or the specific optional form of benefit). A consent naming "any beneficiary the participant may designate" is invalid unless it expressly permits later changes without further consent. |
| Acknowledges the effect | The spouse must acknowledge the effect of the election — that they are giving up a survivor benefit. |
| Witnessed | By a plan representative or a notary public. A witness who is neither is not sufficient. |
| Irrevocable by the spouse | Once given, the spouse may not unilaterally revoke; the participant may revoke the election, and a new election requires new consent. |
When Consent Is Not Required
- The participant is unmarried (establish with a participant certification).
- The spouse cannot be located, established to the satisfaction of the plan administrator.
- The participant is legally separated or abandoned with a court order, and the plan so provides.
- A QDRO already assigns the benefit to a former spouse as alternate payee.
- The vested balance is $7,000 or less and is being cashed out involuntarily.
Marriage After Designation
A common fact pattern: a participant designated a parent as beneficiary while single, then married. Upon death, the surviving spouse takes the account regardless of the stale designation — unless the spouse consented after the marriage. Note that a plan may require the couple to have been married for at least one year before the spousal death benefit attaches, if the document says so.
Timing of the QJSA Explanation
For plans subject to the rules, the written explanation of the QJSA — its terms, the right to waive, the spouse's consent rights, and the relative values of the optional forms — must be provided no less than 30 and no more than 180 days before the annuity starting date.
The participant may waive the 30-day minimum and elect a distribution as soon as 7 days after the explanation is provided, if the plan permits. The 180-day outer limit was set by the Pension Protection Act of 2006, which lengthened the prior 90-day window.
Common ASPPA QKA Exam Traps
- Trap 1 — Treating a money purchase plan as exempt. It is a pension plan; QJSA and QPSA always apply.
- Trap 2 — Applying only one or two exemption conditions. All three of IRC §401(a)(11)(B)(iii) must be satisfied.
- Trap 3 — Forgetting the transferee condition. A 401(k) that absorbed money purchase assets is a transferee plan.
- Trap 4 — Accepting a witnessed-by-a-coworker consent. Only a plan representative or notary qualifies.
- Trap 5 — Blanket consents. The consent must identify the specific beneficiary or form.
- Trap 6 — QOSA percentages. If the QJSA survivor percentage is under 75%, the QOSA is 75%; if it is 75% or more, the QOSA is 50%.
A 401(k) plan accepted a merger of assets from the sponsor's terminated money purchase pension plan in 2019. In 2026 a married participant requests a lump sum of his entire balance and names his brother as death beneficiary. What is required?
Which spousal consent is valid under IRC §417(a)(2)?
A defined benefit plan's QJSA provides a 50% survivor annuity. What must the Qualified Optional Survivor Annuity provide?