29 U.S.C. § 1055 — Requirement of joint and survivor annuity and preretirement survivor annuity
submitted 52 years ago by Pub. L. 93-406 to r/title-29-LABOR · 3,165 words · no verdicts yet
This section generally requires covered pension plans to provide joint-and-survivor benefits for married participants and survivor benefits for spouses of participants who die before payments start. It sets waiver, spousal-consent, notice, definition, valuation, marriage, and loan-security rules.
(a) Required benefits
Each covered pension plan* must provide: (1) for a vested participant* who lives to the annuity starting date, the accrued benefit as a qualified joint-and-survivor annuity; and (2) for a vested participant who dies before that date and has a surviving spouse, a qualified preretirement survivor annuity for the spouse.
(b) Covered plans
(1) This section covers (A) every defined-benefit plan*; (B) every individual-account plan subject to section 1082 funding standards; and (C) a participant in another individual-account plan unless the plan pays the participant’s full nonforfeitable benefit, reduced by a loan security interest, at death to the surviving spouse or, if there is no spouse or the spouse gives the required consent, a designated beneficiary*; the participant does not choose a life annuity; and the plan is not a direct or indirect transferee after December 31, 1984, of a plan described in (A) or (B), or a plan to which this exception applied. The transferee rule applies only to transferred assets and their income if separately accounted for.
(2)(A) For a tax-credit employee* stock ownership plan under section 409(a) of title 26 or an employee stock ownership plan under section 4975(e)(7), (a) does not apply to the part of the accrued benefit subject to section 409(h) of title 26.
(B) That exception applies only if the conditions in (1)(C)(i), (ii), and (iii) are met.
(4) This section does not apply to a plan determined by the Treasury Secretary* or delegate to be a section 404(c) plan, or its continuation, in which participation is mainly limited to people who stopped covered employment before January 1, 1976.
(4) A plan does not fail (1)(C) or (2) merely because it requires the participant and spouse to have been married for the year ending on the earlier of the annuity starting date or death.
(c) Plan requirements
(1) Each participant must be able during the applicable election period to waive the qualified joint-and-survivor annuity or qualified preretirement survivor annuity, elect a qualified optional survivor annuity after waiving, and revoke an election. The plan must also meet (2), (3), and (4).
(2) A waiver is effective only if the spouse gives written consent that names an unchangeable beneficiary or benefit form, acknowledges the effect, and is witnessed by a plan representative or notary; or a plan representative finds that consent cannot be obtained because there is no spouse, the spouse cannot be located, or regulations provide another reason. Consent is effective only for that spouse.
(3)(A) Before the annuity starting date, the plan must give each participant a written, regulation-compliant explanation of the joint-and-survivor and optional annuities, the right and effect of waiving, the spouse’s rights, and the right and effect of revoking.
(B) During the applicable period, it must give a comparable explanation of the preretirement annuity. That period ends last among: (I) the period from the first day of the plan year* in which the participant turns 32 through the end of the year before turning 35; (II) a reasonable period after becoming a participant; (III) a reasonable period after (5) stops applying; and (IV) a reasonable period after this section applies. For someone separating before 35, it is a reasonable period after separation.
(4) If the benefit secures a loan, the plan may use it as security only if the spouse gives written consent during the 90 days ending on the security date and comparable consent requirements are met.
(5) These requirements do not apply to an annuity that cannot be waived or replaced and whose cost the plan fully subsidizes. Full subsidy means not waiving it would not reduce the participant’s plan benefits or increase the participant’s contributions.
(6) A fiduciary acting under this subtitle’s part 4 may rely on a consent or revocation, or make the (2) determination, and it is valid to discharge liability to the extent of payments made under the Act.
(7) The applicable election period is the 180 days ending on the annuity starting date for a joint-and-survivor waiver, and for a preretirement waiver the period from the first day of the plan year in which the participant turns 35 through death. For a separated participant, the latter period for benefits accrued before separation cannot begin later than separation.
(8) A plan may give the (3)(A) explanation after the starting date, but the election period cannot end before 30 days after delivery. Treasury regulations may limit this rule but cannot make the starting date earlier than employment termination. A participant may waive the 30-day timing rule, with required spousal consent, if distribution begins more than seven days after the explanation.
(d) Qualified annuities
(1) A qualified joint-and-survivor annuity pays the participant for life and the spouse for life a survivor amount from 50 to 100 percent of the amount paid during their joint lives, and is the actuarial equivalent of a single-life annuity for the participant. It also includes an annuity with the same effect.
(2)(A) A qualified optional survivor annuity pays the participant for life and the spouse for life a survivor amount equal to the applicable percentage of the joint-life amount, and is actuarially equivalent to the participant’s single-life annuity. Equivalent forms are included.
(B) If the plan’s survivor percentage is below 75 percent, the applicable percentage is 75 percent. If it is at least 75 percent, the applicable percentage is 50 percent. The survivor percentage is the qualified joint-and-survivor survivor amount divided by the joint-life amount.
(e) Qualified preretirement survivor annuity
(1) Except under (2), it is a survivor annuity for the spouse’s life whose payments are at least what the qualified joint-and-survivor annuity would pay if a participant dying after earliest retirement age had retired with that annuity the day before death, or if dying earlier had separated on death, survived to earliest retirement age, retired then with the annuity, and died the next day. Payments must be allowed no later than the month the participant would reach earliest retirement age. For someone already separated, the assumed separation-on-death step does not apply.
(2) For an individual-account plan or participant described in (b)(1)(B) or (C), it is a spouse-life annuity actuarially equivalent to at least 50 percent of the participant’s nonforfeitable account balance at death.
(3) A plan loan security interest is included in determining the amount.
(f) Marriage
(1) A plan may require the participant and spouse to have been married throughout the year ending on the earlier of the starting date or death.
(2) If they marry within the year before the starting date but have been married at least one year by the participant’s death, they are treated as married throughout the year ending on the starting date.
(g) Present value
(1) A plan may immediately distribute a qualified annuity’s present value if it is no more than the amount distributable without consent under section 1053(e). After the starting date, written consent of the participant and spouse, or surviving spouse after death, is required.
(2) If the value is above that amount, the plan may immediately distribute it if those people consent in writing.
(3) The value cannot be less than the value calculated with the applicable mortality table and interest rate. The mortality table is the appropriately modified table specified for the plan year under section 1083(h)(3)(A). The interest rate is the adjusted first, second, and third segment rates under rules similar to section 1083(h)(2)(C), using the month before distribution or another regulatory time. The adjusted rates use that month’s average yields instead of the 24-month averages, without the specified adjustment.
(h) Definitions
(1) “Vested participant” means a participant with a nonforfeitable right to any part of the accrued benefit, as section 1002(19) defines that concept.
(2) “Annuity starting date” means the first day of the first annuity-payment period, or, for a non-annuity benefit, the first day when all events giving entitlement have occurred. A disability benefit’s first payment period counts only if it is not an auxiliary benefit.
(3) “Earliest retirement age” means the earliest date the participant could elect retirement benefits under the plan.
(i) Increased annuity costs
A plan may account in any equitable manner, as the Treasury Secretary determines, for increased costs of providing a qualified joint-or-survivor or preretirement survivor annuity.
(j) Loan security and required distributions
If using the accrued benefit as loan security meets (c)(4), this section does not prevent a distribution required because the loan terms were not met.
(k) Spousal consent
Spousal consent for (g)(1) or (2) is effective only if it meets requirements comparable to those for consent under (c)(1)(A).
(l) Regulations
When issuing regulations, the Treasury Secretary must consult the Labor Secretary.
Each pension plan* to which this section applies shall provide that—
in the case of a vested participant* who does not die before the annuity starting date, the accrued benefit payable to such participant shall be provided in the form of a qualified joint and survivor annuity, and
in the case of a vested participant who dies before the annuity starting date and who has a surviving spouse, a qualified preretirement survivor annuity shall be provided to the surviving spouse of such participant.
This section shall apply to—
any defined benefit plan*,
any individual account plan which is subject to the funding standards of section 1082 of this title, and
any participant under any other individual account plan unless—
such plan provides that the participant’s nonforfeitable accrued benefit (reduced by any security interest held by the plan by reason of a loan outstanding to such participant) is payable in full, on the death of the participant, to the participant’s surviving spouse (or, if there is no surviving spouse or the surviving spouse consents in the manner required under subsection (c)(2), to a designated beneficiary*),
such participant does not elect the payment of benefits in the form of a life annuity, and
with respect to such participant, such plan is not a direct or indirect transferee (in a transfer after December 31, 1984) of a plan which is described in subparagraph (A) or (B) or to which this clause applied with respect to the participant.
Clause (iii) of subparagraph (C) shall apply only with respect to the transferred assets (and income therefrom) if the plan separately accounts for such assets and any income therefrom.
In the case of—
a tax credit employee* stock ownership plan (as defined in section 409(a) of title 26), or
an employee stock ownership plan (as defined in section 4975(e)(7) of title 26),
subsection (a) shall not apply to that portion of the employee’s accrued benefit to which the requirements of section 409(h) of title 26 apply.
Subparagraph (A) shall not apply with respect to any participant unless the requirements of clause 1 (i), (ii), and (iii) of paragraph (1)(C) are met with respect to such participant.
2 This section shall not apply to a plan which the Secretary* of the Treasury or his delegate has determined is a plan described in section 404(c) of title 26 (or a continuation thereof) in which participation is substantially limited to individuals who, before January 1, 1976, ceased employment covered by the plan.
2 A plan shall not be treated as failing to meet the requirements of paragraph (1)(C) or (2) merely because the plan provides that benefits will not be payable to the surviving spouse of the participant unless the participant and such spouse had been married throughout the 1-year period ending on the earlier of the participant’s annuity starting date or the date of the participant’s death.
A plan meets the requirements of this section only if—
under the plan, each participant—
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),
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
may revoke any such election at any time during the applicable election period, and
the plan meets the requirements of paragraphs (2), (3), and (4).
Each plan shall provide that an election under paragraph (1)(A)(i) shall not take effect unless—
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
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 of the Treasury 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.
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 of the Treasury may prescribe) a written explanation of—
the terms and conditions of the qualified joint and survivor annuity and of the qualified optional survivor annuity,
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,
the rights of the participant’s spouse under paragraph (2), and
the right to make, and the effect of, a revocation of an election under paragraph (1).
Each plan shall provide to each participant, within the applicable period with respect to such participant (and consistent with such regulations as the Secretary may prescribe), a written explanation with respect to the qualified preretirement survivor annuity comparable to that required under subparagraph (A).
For purposes of clause (i), the term “applicable period” means, with respect to a participant, whichever of the following periods ends last:
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.
A reasonable period after the individual becomes a participant.
A reasonable period ending after paragraph (5) ceases to apply to the participant.
A reasonable period ending after this section 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.
Each plan shall provide that, if this section 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—
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
requirements comparable to the requirements of paragraph (2) are met with respect to such consent.
The requirements of this subsection shall not apply with respect to the qualified joint and survivor annuity form of benefit or the qualified preretirement survivor annuity form of benefit, as the case may be, if such benefit may not be waived (or another beneficiary selected) and if the plan fully subsidizes the costs of such benefit.
For purposes of subparagraph (A), a plan fully subsidizes the costs of a benefit if under the plan the failure to waive such benefit by a participant would not result in a decrease in any plan benefits with respect to such participant and would not result in increased contributions from such participant.
If a plan fiduciary acts in accordance with part 4 of this subtitle in—
relying on a consent or revocation referred to in paragraph (1)(A), or
making a determination under paragraph (2),
then such consent, revocation, or determination shall be treated as valid for purposes of discharging the plan from liability to the extent of payments made pursuant to such Act.
For purposes of this subsection, the term “applicable election period” means—
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
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.
Notwithstanding any other provision of this subsection—
A plan may provide the written explanation described in paragraph (3)(A) after the annuity starting date. In any case to which this subparagraph applies, the applicable election period under paragraph (7) shall not end before the 30th day after the date on which such explanation is provided.
The Secretary of the Treasury may by regulations limit the application of clause (i), except that such regulations may not limit the period of time by which the annuity starting date precedes the provision of the written explanation other than by providing that the annuity starting date may not be earlier than termination of employment.
A plan may permit a participant to elect (with any applicable spousal consent) to waive any requirement that the written explanation be provided at least 30 days before the annuity starting date (or to waive the 30-day requirement under subparagraph (A)) if the distribution commences more than 7 days after such explanation is provided.
For purposes of this section, the term “qualified joint and survivor annuity” means an annuity—
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
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.
For purposes of this section, the term “qualified optional survivor annuity” means an annuity—
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
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.
For purposes of subparagraph (A), if the survivor annuity percentage—
is less than 75 percent, the applicable percentage is 75 percent, and
is greater than or equal to 75 percent, the applicable percentage is 50 percent.
For purposes of clause (i), the term “survivor annuity percentage” means the percentage which the survivor annuity under the plan’s qualified joint and survivor annuity bears to the annuity payable during the joint lives of the participant and the spouse.
For purposes of this section—
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—
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—
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
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—
separated from service on the date of death,
survived to the earliest retirement age,
retired with an immediate qualified joint and survivor annuity at the earliest retirement age, and
died on the day after the day on which such participant would have attained the earliest retirement age, and
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.
In the case of any individual account plan or participant described in subparagraph (B) or (C) of subsection (b)(1), the term “qualified preretirement survivor annuity” means an annuity for the life of the surviving spouse the actuarial equivalent of which is not less than 50 percent of the portion of the account balance of the participant (as of the date of death) to which the participant had a nonforfeitable right (within the meaning of section 1053 of this title).
For purposes of paragraphs (1) and (2), any security interest held by the plan by reason of a loan outstanding to the participant shall be taken into account in determining the amount of the qualified preretirement survivor annuity.
Except as provided in paragraph (2), a plan may provide 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—
the participant’s annuity starting date, or
the date of the participant’s death.
For purposes of paragraph (1), if—
a participant marries within 1 year before the annuity starting date, and
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.
A plan may provide that the present value of a qualified joint and survivor annuity or a qualified preretirement survivor annuity will be immediately distributed if such value does not exceed the amount that can be distributed without the participant’s consent under section 1053(e) of this title. No distribution may be made under the preceding sentence after the annuity starting date unless the participant and the spouse of the participant (or where the participant has died, the surviving spouse) consent in writing to such distribution.
If—
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 1053(e) of this title, and
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.
For purposes of paragraphs (1) and (2), the present value shall not be less than the present value calculated by using the applicable mortality table and the applicable interest rate.
For purposes of subparagraph (A)—
The term “applicable mortality table” means a mortality table, modified as appropriate by the Secretary of the Treasury, based on the mortality table specified for the plan year under subparagraph (A) of section 1083(h)(3) of this title (without regard to subparagraph (C) or (D) of such section).
The term “applicable interest rate” means the adjusted first, second, and third segment rates applied under rules similar to the rules of section 1083(h)(2)(C) of this title (determined by not taking into account any adjustment under clause (iv) thereof) for the month before the date of the distribution or such other time as the Secretary of the Treasury may by regulations prescribe.
For purposes of clause (ii), the adjusted first, second, and third segment rates are the first, second, and third segment rates which would be determined under section 1083(h)(2)(C) of this title (determined by not taking into account any adjustment under clause (iv) thereof) if section 1083(h)(2)(D) of this title were applied by substituting the average yields for the month described in clause (ii) for the average yields for the 24-month period described in such section.
For purposes of this section—
The term “vested participant” means any participant who has a nonforfeitable right (within the meaning of section 1002(19) of this title) to any portion of such participant’s accrued benefit.
The term “annuity starting date” means—
the first day of the first period for which an amount is payable as an annuity, or
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.
For purposes of subparagraph (A), the first day of the first period for which a benefit is to be received by reason of disability shall be treated as the annuity starting date only if such benefit is not an auxiliary benefit.
The term “earliest retirement age” means the earliest date on which, under the plan, the participant could elect to receive retirement benefits.
A plan may take into account in any equitable manner (as determined by the Secretary of the Treasury) any increased costs resulting from providing a qualified joint or survivor annuity or a qualified preretirement survivor annuity.
If the use of any participant’s accrued benefit (or any portion thereof) as security for a loan meets the requirements of subsection (c)(4), nothing in this section shall prevent any distribution required by reason of a failure to comply with the terms of such loan.
No consent of a spouse shall be effective for purposes of subsection (g)(1) or (g)(2) (as the case may be) unless requirements comparable to the requirements for spousal consent to an election under subsection (c)(1)(A) are met.
In prescribing regulations under this section, the Secretary of the Treasury shall consult with the Secretary of Labor.
Source credit: (Pub. L. 93–406, title I, § 205, Sept. 2, 1974, 88 Stat. 862; Pub. L. 98–397, title I, § 103(a), Aug. 23, 1984, 98 Stat. 1429; Pub. L. 99–514, title XI, §§ 1139(c)(2), 1145(b), title XVIII, § 1898(b)(1)(B), (2)(B), (3)(B), (4)(B), (5)(B), (6)(B), (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), (12)(B), (13)(B), (14)(B), Oct. 22, 1986, 100 Stat. 2488, 2491, 2945–2951; Pub. L. 101–239, title VII, §§ 7861(d)(2), 7862(d)(1)(B), (3), (6)–(9), 7891(a)(1), (b)(3), (c), (e), 7894(c)(7)(A), Dec. 19, 1989, 103 Stat. 2431, 2434, 2445, 2447, 2449; Pub. L. 103–465, title VII, § 767(c)(2), Dec. 8, 1994, 108 Stat. 5039; Pub. L. 104–188, title I, § 1451(b), Aug. 20, 1996, 110 Stat. 1815; Pub. L. 105–34, title X, § 1071(b)(2), title XVI, § 1601(d)(5), Aug. 5, 1997, 111 Stat. 948, 1089; Pub. L. 107–147, title IV, § 411(r)(2), Mar. 9, 2002, 116 Stat. 51; Pub. L. 109–280, title III, § 302(a), title X, § 1004(b), title XI, § 1102(a)(2)(A), Aug. 17, 2006, 120 Stat. 920, 1054, 1056; Pub. L. 110–458, title I, § 103(b)(1), Dec. 23, 2008, 122 Stat. 5103; Pub. L. 112–141, div. D, title II, § 40211(b)(3)(B), July 6, 2012, 126 Stat. 849; Pub. L. 113–295, div. A, title II, § 221(a)(57)(B)(ii), Dec. 19, 2014, 128 Stat. 4046.)
- 1974Enacted · Pub. L. 93-406 · 88 Stat. 862
- 1984Amended · Pub. L. 98-397 · 98 Stat. 1429
- 1986Amended · Pub. L. 99-514 · 100 Stat. 2488, 2491, 2945
- 1989Amended · Pub. L. 101-239 · 103 Stat. 2431, 2434, 2445, 2447, 2449
- 1994Amended · Pub. L. 103-465 · 108 Stat. 5039
- 1996Amended · Pub. L. 104-188 · 110 Stat. 1815
- 1997Amended · Pub. L. 105-34 · 111 Stat. 948, 1089
- 2002Amended · Pub. L. 107-147 · 116 Stat. 51
- 2006Amended · Pub. L. 109-280 · 120 Stat. 920, 1054, 1056
- 2008Amended · Pub. L. 110-458 · 122 Stat. 5103
- 2012Amended · Pub. L. 112-141 · 126 Stat. 849
- 2014Amended · Pub. L. 113-295 · 128 Stat. 4046
A history note hasn’t been published yet. The record shows enactment by Pub. L. 93-406 on 1974-09-02.
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