The Financial Rights of First Wives

I hate to be a stickler for details, but the absolute right is not absolute. There is a specific provision in the regulations that allows for exceptions for short-term marriages.

Question 26 of Regulation 1.401(a)-20 allows a plan to require that a participant be married for at least a year. Other than that, the participant’s spouse must waive their right to be the beneficiary. The following may be helpful:

Requirements of qualified joint and survivor annuity and qualified preretirement survivor annuity

§1.401(a)-20

Q-32: What rules govern a participant’s waiver of the spousal benefit under section 401(a)(11)(B)?

A-32: (a) Application. In the case of a defined contribution plan that is not subject to the survivor annuity requirements of sections 401(a)(11) and 417, a participant may waive the spousal benefit of section 401(a)(11)(B)(iii) if the conditions of paragraph (b) are satisfied. In general, a spousal benefit is the nonforfeitable account balance on the participant’s date of death.

(b) Conditions. In general, the same conditions, other than the age 35 requirement, that apply to the participant’s waiver of a QPSA and the spouse’s consent thereto apply to the participant’s waiver of the spousal benefit and the spouse’s consent thereto. See Q&A-31. Thus, the participant’s waiver of the spousal benefit must state the specific nonspouse beneficiary who will receive such benefit. The waiver is not required to specify the optional form of benefit. The participant may change the optional form of benefit, but not the nonspouse beneficiary, without obtaining the spouse’s consent.

Richard N Carpenter, CPC, CEBS

PO Box 25974

Christiansted, St Croix, US Virgin Islands 00824

404-277-7678

340-514-4714

RNC@USVIpensions.com

Richard Carpenter 1:48PM July 14, 2008