QDRO Survivor & Death Benefits in QDROs 1 — Questions and Answers
Question 1: What is a Qualified Pre-Retirement Survivor Annuity (QPSA)?
- An annuity paid to the surviving spouse if the participant dies before the annuity starting date (Correct answer)
- An annuity paid to the participant upon early retirement
- A benefit paid to the alternate payee upon the participant's post-retirement death
- A lump-sum payment made to all named beneficiaries at plan termination
Correct answer: An annuity paid to the surviving spouse if the participant dies before the annuity starting date
A QPSA is a survivor annuity provided to the surviving spouse if the plan participant dies before the annuity starting date (i.e., before retirement benefits begin).
Question 2: Under ERISA, which types of plans are required to provide a Qualified Joint and Survivor Annuity (QJSA)?
- Only 401(k) plans with more than 100 participants
- Only SEP-IRAs and SIMPLE IRAs
- Defined benefit plans and money purchase pension plans (Correct answer)
- All employer-sponsored IRA accounts
Correct answer: Defined benefit plans and money purchase pension plans
ERISA requires defined benefit plans and money purchase pension plans to offer a QJSA as the default form of payment for married participants.
Question 3: A QDRO can award the alternate payee survivor annuity rights even if:
- The participant has already begun receiving retirement benefits (Correct answer)
- The plan has fewer than 10 participants
- The alternate payee has remarried and changed their name
- The divorce occurred more than 10 years ago
Correct answer: The participant has already begun receiving retirement benefits
A QDRO can assign survivor annuity rights to an alternate payee even after the participant has begun receiving benefits, provided the plan's terms permit such an award.
Question 4: What happens to an alternate payee's potential survivor benefit if the participant dies before the QDRO is finalized by the court?
- The benefit is automatically forfeited because no order exists
- The current spouse automatically receives all survivor benefits
- The plan must hold the disputed funds pending court resolution
- The alternate payee may still be entitled to benefits if a qualifying order is subsequently issued (Correct answer)
Correct answer: The alternate payee may still be entitled to benefits if a qualifying order is subsequently issued
Courts may still issue a qualifying domestic relations order after a participant's death, and many plans place disputed funds on hold pending qualification of a pending order.
Question 5: Which provision in a QDRO specifically protects the alternate payee's interest in receiving a pre-retirement death benefit?
- The shared payment approach clause
- The cost-of-living adjustment clause
- The pre-retirement survivor annuity designation clause (Correct answer)
- The early withdrawal penalty waiver clause
Correct answer: The pre-retirement survivor annuity designation clause
A pre-retirement survivor annuity designation clause in a QDRO explicitly protects the alternate payee's interest if the participant dies before retirement benefits commence.
Question 6: Under the 'separate interest' approach in a defined benefit plan QDRO, what happens to the alternate payee's benefit if the alternate payee dies before the participant?
- Benefits revert entirely to the participant's account
- Benefits are paid to the participant as a survivor annuity
- The separate interest ceases and is forfeited (Correct answer)
- Benefits transfer to the alternate payee's estate for distribution
Correct answer: The separate interest ceases and is forfeited
Under the separate interest approach, the alternate payee's benefit is based solely on their own life, so if the alternate payee dies, their separate interest ceases without reversion to the participant.
Question 7: What is the key distinction between QJSA and QPSA survivor protections as they relate to a QDRO?
- QJSA applies after the annuity starting date; QPSA applies before the annuity starting date (Correct answer)
- QJSA applies only to defined contribution plans; QPSA applies only to defined benefit plans
- QPSA requires plan participant consent; QJSA does not require any consent
- QJSA and QPSA are identical in application and timing
Correct answer: QJSA applies after the annuity starting date; QPSA applies before the annuity starting date
The QJSA protects the surviving spouse after the annuity starting date (post-retirement), while the QPSA protects the surviving spouse if the participant dies before retirement benefits begin.
QDRO Survivor & Death Benefits in QDROs 1
What is a Qualified Pre-Retirement Survivor Annuity (QPSA)?