QJSA Notice
(Defined Benefit Plan)

Summary

This is a template notice regarding a defined benefit retirement plan's qualified joint and survivor annuity (QJSA) form of benefit designed to satisfy the requirements for QJSA notices under I.R.C. § 417(a)(3)(A). This template includes practical guidance, drafting notes, and optional clauses. The QJSA rules (and rules regarding qualified preretirement survivor annuities (QPSAs)).apply to all defined benefit plans (including cash balance plans), money purchase pension plans, and certain defined contribution plans. I.R.C. § 401(a)(11)(A); Treas. Reg. § 1.401(a)-20, Q&A-3; ERISA § 205(b) (29 U.S.C. § 1055(b)). The QJSA must be the default form of benefit for these plans and be provided as a joint-and-survivor annuity to the participant and the participant's spouse as the survivor beneficiary, with the survivor annuity percentage being between 50% and 100% of the participant's life annuity. I.R.C. §§ 401(a)(11), 417(b); Treas. Reg. §§ 1.401(a)-20, Q&A-16, 1.401(a)-(11); ERISA § 205(d)(1) (29 U.S.C. § 1055(d)(1)). The QJSA notice must describe the terms of the QJSA and available optional forms of benefit under the plan. Provide this template with the QJSA Waiver (Spousal Consent) (Defined Benefit Plan), which a married participant's spouse will need to complete for the participant to waive the QJSA in favor of a different form of payment offered by the plan (other than a qualified optional survivor annuity). Generally, each plan subject to the QJSA rules must provide a written explanation of the QJSA to participants no less than 30 days and no more than 180 days prior to the participant's annuity starting date, containing the following information: • The terms and conditions of the QJSA • The participant's right to make, and the effect of, an election under I.R.C. § 417(a)(1) to waive the joint and survivor annuity form of benefit (and to select an optional form of benefit) • The rights of the participant's spouse to consent to a participant's election to waive the QJSA • The right to revoke, and the effect of, a revocation of an election • A description of each optional form of benefit available under the plan, including the qualified optional survivor annuity (QOSA), which is now a required optional form of benefit for plans subject to the QJSA rules • A description of the eligibility conditions for each optional form of benefit • A description of the financial effect of electing each optional form of benefit (i.e., the amounts and timing of payments to the participant under the form of benefit during the participant's lifetime, and the amounts and timing of payments after the participant's death) • In the case of a defined benefit plan, a description of the relative value of each optional form of benefit compared to the value of the QJSA • A description of any other material features of each optional form of benefit I.R.C. § 417(a)(3)(A), (6)(A). See also Treas. Reg. § 1.401(a)-11(c)(1); Treas. Reg. § 1.417(a)(3)-1(a), (b)(2) (c), (d); Treas. Reg. § 1.417(e)-1(b)(3)(ii); I.R.S. Notice 2007-7, Section VIII; I.R.S. Notice 2008-30, Section III; Prop. Treas. Reg. § 1.417(e)-1(b)(3)(ii) (73 Fed. Reg. 59,575, 59,577 (Oct. 9, 2008)). For a discussion of the QJSA/QOSA/QPSA rules, see Beneficiary Designations in Qualified Retirement Plans — Survivor Annuity Rules, Employee Benefits Guide § 4.01, and Tax Planning for Retirees § 2.11. For a template providing for a spouse's consent to waive their rights to the survivor portion of the QJSA, see QJSA Waiver (Spousal Consent) (Defined Benefit Plan). For similar templates related to a QPSA, see QPSA Notice (Defined Benefit Plan) and QPSA Waiver (Spousal Consent) (Defined Benefit Plan). For an additional discussion on beneficiary designations, see The Law of Life and Health Insurance § 5.21, Beneficiary Provisions—Designation, Change, and Rights); The Law of Life and Health Insurance § 9.14, "Beneficiaries", and SY013 ALI-ABA 1837, "Integrating Retirement Plan Issues into the High Net Worth Estate Plan. For a full listing of key content covering retirement plan notification requirements, see ERISA Retirement Plan Notices Resource Kit.