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NOTICE 94-23
PURPOSE
This notice solicits comments from the public to assist in the development of additional guidance pertaining to spousal consent under section 417 of the Internal Revenue Code. Section 417 imposes requirements relating to joint and survivor annuities under certain tax-qualified retirement plans, including spousal consent to participants' waivers of joint and survivor annuities.
BACKGROUND
Section 401(a)(11) provides that, in order to be a qualified plan under section 401(a), certain plans must provide benefits in the form of a qualified joint and survivor annuity (J&S annuity). Under certain circumstances, section 417 permits a participant to elect another form of benefit if the participant's spouse signs a consent form.
The spousal consent requirement was added by the Retirement Equity Act of 1984, Pub. L. No. 98-397, 98 Stat 1426 (1984), (REA) after spouses of participants testified during Congressional hearings that their rights to survivor benefits were not adequately protected. Testimony indicated that some participants chose pension options that paid higher benefits during the participants' own lifetimes but did not provide a continuing benefit to the surviving spouses. According to those testifying, this sometimes occurred without prior consultation with the affected spouse, and it sometimes left the spouse without adequate financial resources after the participant's death. The legislative history of the spousal consent provision indicates the requirements were intended to address these concerns.
REA also mandated that the General Accounting Office (GAO) study and report on the effect on women of changes in federal pension legislation. GAO published a report in December 1989 entitled...