IRC 417: QJSA and QPSA Rules, Waivers, and Spousal Consent

Internal Revenue Code Section 417 sets the minimum survivor annuity requirements that keep a married retirement plan participant from cutting a spouse out of pension benefits without the spouse’s knowledge. It does this through two automatic payment forms: a Qualified Joint and Survivor Annuity (QJSA) when benefits begin at retirement, and a Qualified Preretirement Survivor Annuity (QPSA) if the participant dies before retiring. Both are the default. Either can be waived only if the spouse signs a written consent, witnessed by a notary or plan representative, within a specific election window.

Which Plans Have to Follow These Rules

Section 417 covers every defined benefit plan and any defined contribution plan subject to minimum funding rules, such as a money purchase pension plan.¹ These are the plans built to pay income as an annuity, so the spousal protections fit naturally.

Profit-sharing plans, 401(k) plans, and similar account-based plans are generally exempt, but only if all three of these conditions are met:

The plan pays the participant’s entire vested account balance to the surviving spouse on the participant’s death, unless the spouse has consented to a different beneficiary.
The participant has not elected to receive benefits as a life annuity.
The plan did not receive a transfer of assets from a defined benefit plan or any other plan that was itself subject to the QJSA/QPSA rules.

Miss any one of those, and the full QJSA and QPSA framework applies to the account-based plan.¹ Employee stock ownership plans have their own separate exemption for the portion of benefits subject to ESOP distribution rules.

One boundary worth flagging up front: a prenuptial agreement is not a valid waiver of QJSA or QPSA rights. The statute requires consent from “the spouse,” and a person signing a prenup is not yet a spouse. A valid waiver has to be executed after the marriage, during the applicable election period, with the witnessing requirements satisfied.

What the QJSA Pays

The QJSA is the default payment form whenever a married participant starts drawing benefits from a covered plan. The participant receives an annuity for life. When the participant dies, a portion of that annuity continues to the surviving spouse for the rest of the spouse’s life. The survivor portion has to be at least 50% and no more than 100% of what the participant was receiving.² Most plans set the number at 50% or 75%; the exact percentage lives in the plan document.

Because the benefit is expected to run across two lifetimes rather than one, the monthly payment the participant collects while alive is lower than a single-life annuity on the same accrued benefit would be. Plans use mortality tables and interest assumptions to make the QJSA actuarially equivalent to that single-life annuity. The reduction is the price of guaranteeing the spouse lifetime income.

Even if the participant plans to take a lump sum, the plan has to offer the benefit as a QJSA first. Choosing the lump sum instead counts as a QJSA waiver and triggers spousal consent. The plan cannot skip the QJSA step just because the participant would rather have cash.

The default QJSA survivor percentage is a protected benefit. A plan sponsor cannot retroactively cut the survivor percentage on benefits a participant has already earned.³

The Qualified Optional Survivor Annuity

Plans also have to offer a Qualified Optional Survivor Annuity (QOSA) alongside the QJSA, with a survivor percentage on the other side of 75%:

If the plan’s QJSA percentage is under 75%, the QOSA must offer 75%.
If the plan’s QJSA percentage is 75% or higher, the QOSA must offer 50%.

So a plan with a 50% default QJSA has to offer a 75% QOSA, giving the couple a larger continuing benefit in exchange for a smaller payment while both are alive. A plan with a 100% default has to offer a 50% QOSA for participants who want more income during the participant’s lifetime and a smaller survivor slice.³ Like the QJSA, the QOSA must be actuarially equivalent to a single-life annuity.

What the QPSA Pays

The QPSA covers the gap between when a participant earns benefits and when payments begin. If a vested participant dies before the annuity starting date, the surviving spouse automatically receives a lifetime annuity based on the accrued benefit. The protection kicks in as soon as the participant has any vested benefit, regardless of age or service.

For a defined benefit plan, the QPSA is calculated as if the participant had retired the day before death, elected the QJSA, and then died immediately. If death occurs before the plan’s earliest retirement age, the benefit reflects what had accrued by the date of death, and the plan may defer payments until the participant would have reached earliest retirement age.

For a defined contribution plan that falls under these rules, the QPSA is simpler: the surviving spouse gets the participant’s entire vested account balance as a death benefit.³

A plan may charge the actuarial cost of QPSA coverage against the participant’s accrued benefit. If it does, the participant must be given the option to waive the QPSA.

How the Spouse Waives the Default Annuity

A participant can opt out of either the QJSA or the QPSA, but only with the spouse’s agreement. Consent has to satisfy all of the following:

It is in writing and acknowledges the effect of giving up the survivor annuity. A blanket authorization letting the participant make whatever future changes they want does not qualify, unless the consent expressly permits the participant to change beneficiaries without further spousal approval.
It names a specific beneficiary or a specific alternative form of benefit, such as a lump-sum payment.
A plan representative or a notary public witnesses the spouse’s signature.

These requirements come straight from the statute and exist so the spouse’s choice is informed and voluntary.³

Election Periods

The QJSA can be waived at any point during the 180-day period ending on the annuity starting date.⁴ That window is designed to keep the decision close to when payments start, so it reflects the couple’s actual financial picture.

The QPSA window is much longer. It opens on the first day of the plan year in which the participant turns 35 and runs until the participant dies. For a participant who leaves the employer before age 35, the election period for pre-separation benefits opens no later than the separation date.⁴ The extended window matters most when the plan charges the cost of QPSA coverage against the participant’s accrued benefit, because it lets the participant waive early and stop paying for it.

Revoking a Waiver

A QJSA waiver can be revoked at any time during the 180-day election period before the annuity starting date. Once payments begin, the choice is effectively locked because the plan has started distributing benefits in the elected form. Whether a QPSA waiver can be revoked depends on the plan document. If it is revoked, the QPSA snaps back into effect and the spouse is restored as beneficiary.

When Consent Is Not Required

The statute allows a waiver without spousal consent in a narrow set of situations: there is no spouse, the spouse cannot be located, or other circumstances prescribed by Treasury regulations apply.³ A plan representative has to be satisfied that a good-faith search for the spouse actually happened before accepting a “cannot be located” justification. A court order in a legal separation or abandonment case can also authorize a non-spouse beneficiary designation. And if the plan meets the full exemption criteria for defined contribution plans described earlier, the consent rules do not apply at all.

Notices the Plan Has to Give First

No waiver is valid unless the plan administrator has given the participant a written explanation of the QJSA or QPSA. A waiver made without the required notice does not count, even if the spouse signed a consent form.

QJSA Notice

The QJSA notice must be provided no earlier than 180 days before the annuity starting date. With the participant’s written acknowledgment, payments may begin fewer than 30 days after the notice is delivered, but the participant must be told of the right to take the full period to decide.

The notice has to cover the right to waive the QJSA, the spouse’s right to consent or refuse, and the financial effect of choosing a different payment form. For a defined benefit plan, it must include a relative value comparison showing how each available option lines up against the QJSA.⁵ The comparison has to be presented so a participant can understand it without doing actuarial math, for example by expressing a lump sum as a percentage of the QJSA’s present value or stating the equivalent annuity amount.

QPSA Notice

The QPSA notice must be delivered during the period beginning when the participant turns 32 and ending with the close of the plan year before the participant turns 35. Participants hired after age 35 must get the notice within one year of becoming a plan participant.⁶ For a participant who separates from service before age 32, the notice has to arrive within a reasonable period after separation.

Electronic Notices and Remote Witnessing

Proposed Treasury regulations permit electronic delivery of Section 417 notices and remote witnessing of spousal consent, on strict conditions. A remote notarization using live audio-video technology has to comply with the state’s own notary rules. Remote witnessing by a plan representative requires the spouse to show a valid photo ID on camera during a live video session, transmit a signed copy of the consent the same day, and receive acknowledgment back from the plan representative. The plan must record and retain the video session.⁷ A pre-recorded video does not satisfy the rule. Plans offering remote witnessing must also keep accepting traditional in-person signatures.

Divorce, QDROs, and a Former Spouse’s Rights

A Qualified Domestic Relations Order issued in a divorce can override the default survivor benefit rules. If a QDRO designates a former spouse as the participant’s surviving spouse for some or all of the survivor benefits, a later spouse cannot be treated as the surviving spouse to that extent.⁸ Participants who remarry often get caught off guard by this.

When a QDRO makes a former spouse the surviving spouse under a plan subject to QJSA and QPSA rules, it is the former spouse whose consent is needed for the participant to elect a different payment form or waive the QPSA. A current spouse’s signature does not substitute. A QPSA can also be paid to a former spouse named as surviving spouse under a QDRO if the participant dies before retirement.⁶

If you are divorced and the QDRO does not cover all of the survivor benefits, contact the plan administrator to designate a beneficiary for the uncovered portion. Otherwise part of the benefit may pass by default under the plan’s terms rather than to the person you intend.

What Happens If the Plan Gets Consent Wrong

A plan that distributes benefits without valid spousal consent has a compliance problem that can eventually threaten its tax-qualified status. The IRS offers a correction pathway through the Employee Plans Compliance Resolution System. The standard fix requires the plan sponsor to contact the participant and spouse so the spouse can retroactively consent to the distribution that already happened.⁹

If the spouse refuses, does not respond, or cannot be found, the spouse is entitled to a benefit under the plan equal to the QJSA survivor annuity that would have been payable had the distribution been done right. The plan may offer the spouse a choice between that ongoing annuity or a lump sum equal to its actuarial present value. This benefit must be provided if the spouse claims it.

An uncorrected failure can lead to plan disqualification, with cascading consequences. The trust loses its tax-exempt status and has to file its own income tax return and pay tax on earnings. Employer contributions become non-deductible until included in employees’ income. Distributions from a disqualified plan cannot be rolled over to an IRA or another plan, so the full amount becomes taxable on distribution. Contributions also become subject to Social Security, Medicare, and federal unemployment taxes.¹⁰ The stakes are high enough that plan sponsors move quickly to fix spousal consent failures once they surface.

1
Office of the Law Revision Counsel. 26 U.S. Code 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
2
Internal Revenue Service. Retirement Topics – Qualified Joint and Survivor Annuity
3
Office of the Law Revision Counsel. 26 USC 417 – Definitions and Special Rules for Purposes of Minimum Survivor Annuity Requirements
4
Office of the Law Revision Counsel. 26 U.S. Code 417 – Definitions and Special Rules for Purposes of Minimum Survivor Annuity Requirements
5
eCFR. 26 CFR 1.417(a)(3)-1 – Required Explanation of Qualified Joint and Survivor Annuity and Qualified Preretirement Survivor Annuity
6
Internal Revenue Service. Retirement Topics – Qualified Pre-Retirement Survivor Annuity (QPSA)
7
Federal Register. Use of an Electronic Medium To Make Participant Elections and Spousal Consents
8
U.S. Department of Labor. QDROs – The Division of Retirement Benefits Through Qualified Domestic Relations Orders
9
Internal Revenue Service. Fixing Common Plan Mistakes – Failure to Obtain Spousal Consent
10
Internal Revenue Service. Tax Consequences of Plan Disqualification