A spousal consent form serves as an official acknowledgment from a married plan participant’s spouse, granting permission to waive their automatic rights to survivor benefits under certain retirement plans. This requirement stems from the Employee Retirement Income Security Act (ERISA) and the Retirement Equity Act of 1984, designed to protect spouses from losing retirement benefits without their consent.
Most workplace retirement plans, including 401(k)s, 403(b)s, and defined-benefit pensions, default to naming the participant’s spouse as the primary beneficiary. This default arrangement provides protections like the Qualified Joint and Survivor Annuity (QJSA), which ensures the surviving spouse continues to receive a portion of retirement income after the participant’s death, and the Qualified Preretirement Survivor Annuity (QPSA), which protects the spouse if the participant dies before retirement.
When a participant wants to:
- Name a beneficiary other than their spouse,
- Take a lump-sum distribution that ends the survivor benefit,
- Or take a loan from the 401(k),
the spouse must sign a consent form to waive these rights formally.
For example, if a plan participant wants to leave their 401(k) to children or a charity instead of their spouse, the spouse must consent in writing. Similarly, taking a lump sum or loan requires spousal approval because these actions can reduce or eliminate survivor benefits.
It’s important to note that while ERISA’s spousal consent rules apply to employer-sponsored plans, they do not govern Individual Retirement Accounts (IRAs). In community property states, however, financial institutions may still require spousal consent for IRAs to prevent future disputes.
Before signing, spouses should fully understand what rights they are relinquishing and consider seeking advice from a financial advisor or attorney. For the plan participant, open communication with their spouse can help avoid misunderstandings.
If a spouse refuses to sign the form, the plan administrator must uphold the spouse’s default rights, and the requested changes cannot proceed. Additionally, issues involving divorce are handled separately through Qualified Domestic Relations Orders (QDROs), which can override beneficiary designations.
For more on related topics like 401(k) loans, see our 401(k) Loan Guide.
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