IRC 417: Survivor Annuity Rules, Waivers, and QDRO Effects

Internal Revenue Code Section 417 sets the minimum survivor annuity requirements that protect a married participant’s spouse from being written out of a retirement plan. Covered plans must pay benefits as a Qualified Joint and Survivor Annuity (QJSA) once the participant retires, and must pay a Qualified Preretirement Survivor Annuity (QPSA) to the surviving spouse if the participant dies first. Either default can be waived, but only with the spouse’s written, witnessed consent during the election window the statute prescribes.

Which Plans Section 417 Covers

Section 417’s survivor annuity rules reach every defined benefit plan and every defined contribution plan subject to the minimum funding standards, which includes money purchase pension plans.¹ Those are the plans built to pay income as an annuity, so the spousal protection fits.

Profit-sharing plans and 401(k) plans are usually outside the rules, but the exemption is conditional. All three of the following must be true:

The plan pays the participant’s full vested account balance to the surviving spouse at death, unless the spouse has consented to a different beneficiary.
The participant has not elected a life annuity as the payment form.
The plan has not received a transfer of assets from a defined benefit plan or any other plan that was subject to the QJSA and QPSA rules.

Miss any one of these, and the plan pulls the full survivor annuity framework back in.¹ Employee stock ownership plans have their own carve-out for the portion of benefits subject to the ESOP distribution rules.

The Qualified Joint and Survivor Annuity

The QJSA is what a married participant automatically receives at retirement from a covered plan. The participant gets an annuity for life, and after the participant dies, the plan continues paying a percentage of that annuity to the surviving spouse for the rest of the spouse’s life. The survivor percentage must be at least 50% and no more than 100% of what the participant was receiving.² Most plans land on 50% or 75%; the exact figure is set in the plan document.

Because the benefit now has to stretch across two lives rather than one, the monthly check while the participant is alive is smaller than a single-life annuity on the same accrued benefit would pay. The plan uses mortality tables and interest assumptions to make the QJSA actuarially equivalent. That reduction is the price of the lifetime guarantee for the surviving spouse.

The QJSA is the starting point even when a participant wants cash. The plan must first present the benefit as a QJSA; choosing a lump sum instead counts as waiving the QJSA and triggers the spousal consent rules. A plan sponsor also cannot cut the survivor percentage retroactively for benefits a participant has already earned, because the survivor percentage is a protected benefit.³

The Qualified Optional Survivor Annuity

Every covered plan has to offer a second annuity option alongside the default. The Qualified Optional Survivor Annuity (QOSA) pairs with the QJSA so that participants always have access to both a lower and a higher survivor percentage:

If the plan’s QJSA survivor percentage is less than 75%, the QOSA must be a 75% survivor annuity.
If the plan’s QJSA survivor percentage is 75% or more, the QOSA must be a 50% survivor annuity.

A plan with a 50% QJSA default therefore must offer a 75% QOSA, and a plan with a 100% default must offer a 50% QOSA.³ The QOSA, like the QJSA, must be actuarially equivalent to a single-life annuity on the same accrued benefit.

The Qualified Preretirement Survivor Annuity

The QPSA protects the spouse if the participant dies after vesting but before benefits begin. It kicks in as soon as the participant has any vested benefit, with no age or service threshold.

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

For a covered defined contribution plan, the QPSA is more straightforward: the surviving spouse receives the participant’s entire vested account balance as a death benefit.³

A plan is allowed to charge the actuarial cost of QPSA coverage against the participant’s accrued benefit, but only if the participant has the option to waive QPSA coverage.

Waiving the Default Annuity Forms

A participant may opt out of either the QJSA or the QPSA, but the spouse has to agree. A valid spousal consent must meet every one of the following:

It is in writing and acknowledges the effect of giving up the survivor annuity. A blanket future authorization does not count unless it 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.
A plan representative or notary public witnesses the spouse’s signature.

These are statutory requirements, and they exist so that the spouse’s decision is informed and voluntary.³

Election Windows

A QJSA waiver can be made at any point during the 180-day period ending on the annuity starting date.⁴ The participant can revoke the waiver anywhere inside that same 180-day window.

The QPSA election window is far wider. It opens on the first day of the plan year in which the participant turns 35 and stays open until death. For a participant who leaves the employer before age 35, the election window for benefits accrued before separation starts no later than the separation date.⁴ The long window matters most when the plan charges the actuarial cost of QPSA coverage against the accrued benefit, because an earlier waiver stops the charge. Whether a QPSA waiver can later be revoked is left to the plan document; if it is revoked, the QPSA snaps back and the spouse is reinstated as beneficiary.

When Consent Is Not Required

The statute allows a waiver without spousal consent in limited situations: there is no spouse, the spouse cannot be located, or other circumstances identified by Treasury regulations apply.³ A plan representative has to be satisfied that a reasonable effort was made to locate the spouse before accepting that justification. A court order in a legal separation or abandonment case can also permit the participant to name a non-spouse beneficiary. And where a defined contribution plan meets the full exemption described earlier, the consent rules never apply in the first place.

Prenuptial Agreements Do Not Work

A prenuptial agreement cannot waive QJSA or QPSA rights. The statute asks for consent from “the spouse,” and someone signing a prenup is not yet a spouse. Even if the agreement specifically addresses retirement benefits, the plan has to disregard it. A valid waiver has to be signed after the marriage, inside the election window, with the witnessing requirements met.

Required Notices

Before any waiver counts, the plan administrator has to deliver a written explanation of the QJSA or QPSA. A waiver signed without proper notice is not valid, even if the consent form itself looks fine.

The QJSA notice must be provided no earlier than 180 days before the annuity starting date. Payments may begin fewer than 30 days after the notice if the participant acknowledges in writing, but the participant has to be told of the right to take the full period. The notice has to spell out the right to waive the QJSA, the spouse’s right to consent or refuse, and the financial effect of each available option. For defined benefit plans, the notice must include a relative value comparison showing each option against the QJSA in terms a participant can understand without doing actuarial math, such as a lump sum expressed as a percentage of the QJSA’s present value.⁵

The QPSA notice has its own window. For most participants, it must be delivered during the period that begins when the participant turns 32 and ends with the close of the plan year before the participant turns 35. A participant hired after age 35 must receive the notice within one year of becoming a plan participant.⁶ For a participant who leaves before age 32, the notice has to come within a reasonable period after separation.

Section 417 notices and spousal consents can be delivered and witnessed electronically under proposed Treasury regulations, but the mechanics are strict. A remote notarization using live audio-video technology must satisfy the state’s notary rules. Remote witnessing by a plan representative requires a live video session in which the spouse shows a valid photo ID, same-day transmission of the signed document, and an acknowledgment back from the plan representative. The session has to be recorded and retained. A pre-recorded video does not satisfy the requirement, and any plan that accepts remote witnessing must continue to accept in-person signatures.⁷

Lump Sums and the Minimum Present Value Floor

When a defined benefit plan offers a lump sum as an alternative to the QJSA, Section 417(e)(3) sets a floor: the lump sum cannot be less than the actuarial present value of the participant’s accrued benefit, calculated using IRS-prescribed segment interest rates and the IRS mortality table.⁸ The IRS publishes new segment rates monthly and updates the mortality table annually.⁹

The floor matters because the lump sum you are offered swings with interest rates. When rates rise, the present value of a future annuity drops and lump sums shrink; when rates fall, lump sums grow. The same accrued monthly benefit can translate into very different lump sums depending on when you retire. The QJSA notice has to show that comparison so the trade-off is visible before you sign anything.

How Divorce and QDROs Change the Picture

A Qualified Domestic Relations Order issued in a divorce can override the default survivor rules. If a QDRO names a former spouse as the participant’s surviving spouse for some or all of the survivor benefits, any later spouse cannot be treated as the surviving spouse to that extent.¹⁰ That is where remarried participants often get caught off guard.

Where a QDRO treats the former spouse as the surviving spouse, it is the former spouse whose consent is needed to elect a different payment form or waive the QPSA. The current spouse’s consent does not substitute. A QPSA may also be payable to the former spouse named under the QDRO if the participant dies before retirement.⁶ If your QDRO does not cover all of the survivor benefits, contact the plan administrator to name a beneficiary for the uncovered portion; otherwise that portion will pass under the plan’s default rules rather than to the person you want.

When the Plan Distributes Without Valid Consent

A plan that pays out benefits without obtaining valid spousal consent has a qualification problem. The IRS offers a correction route through the Employee Plans Compliance Resolution System. The standard fix is for the plan sponsor to go back to the participant and spouse and give the spouse the chance to consent retroactively to the distribution already made.¹¹

If the spouse refuses, cannot be found, or does not respond, the spouse is entitled to a plan benefit equal to the QJSA survivor annuity that would have been payable had the distribution been handled correctly. The plan may offer that spouse a choice between the ongoing annuity or a lump sum of equal actuarial value. The benefit must be provided if the spouse makes a claim. An uncorrected failure can lead to disqualification of the plan, with tax consequences for the trust, the employer, and every participant,¹² which is why sponsors generally move quickly once a spousal consent problem is found.

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
Internal Revenue Service. Minimum Present Value Segment Rates
9
Internal Revenue Service. Updated Static Mortality Tables for Defined Benefit Pension Plans for 2026
10
U.S. Department of Labor. QDROs – The Division of Retirement Benefits Through Qualified Domestic Relations Orders
11
Internal Revenue Service. Fixing Common Plan Mistakes – Failure to Obtain Spousal Consent
12
Internal Revenue Service. Tax Consequences of Plan Disqualification