Detailed Table of Contents
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Chapter 2 continued from previous page.
§ 2.11 Minimum Surviving Spouse Benefits Required of Plans
-----[1] Planning Considerations Where Minimum Surviving Spouse Benefits May Be Required
-----[2] Plans Requiring Spousal Survivor Annuities
----------[a] Plans Requiring Spousal Survivor Annuities Generally
----------[b] Qualified Joint and Survivor Annuity (QJSA)
---------------[i] QJSA Defined
---------------[ii] QJSA Requirements Regarding Value, Marriage, Etc.
---------------[iii] When Plan Must Commence QJSA Payments
--------------------[A] Commencement of QJSA Payments Generally
--------------------[B] Retirement At a Plan’s Normal Retirement Age
--------------------[C] Retirement At a Plan’s Early Retirement Age
--------------------[D] Separation Before Reaching Early or Normal Retirement Age
---------------[iv] How QJSA Payments Are Taxed
---------------[v] Recovered and Unrecovered Investment in a QJSA
----------[c] Qualified Preretirement Survivor Annuity (QPSA)
---------------[i] QPSA Defined
---------------[ii] QPSA Requirements Regarding Payments, Marriage, Etc.
---------------[iii] When Plan Must Commence QPSA Payments
---------------[iv] How QPSA Payments Are Taxed
-----[3] Annuity Starting Date for a QJSA or QPSA
-----[4] Waiver of a QJSA or QPSA
----------[a] Waiver Period for QJSA or QPSA
----------[b] Extended Waiver Period for QJSA
----------[c] Spousal Consent Required
----------[d] Optional Forms of Benefit after Waiver of a QJSA
----------[e] Optional Spousal Annuity in Lieu of QJSA
----------[f] When Waiver Not Allowed
-----[5] Spousal Consent to Use Plan Benefits to Secure a Loan
-----[6] Consent When Spouse Unavailable or Incapacitated
-----[7] Exception for Profit-Sharing or Stock Bonus Plans
----------[a] When Spousal Annuity Requirements Do Not Apply
----------[b] Participant Waiver with Spousal Consent
----------[c] Plan Mergers, Spinoffs, and Similar Transfers
----------[d] Plan Distributions and Loans to the Participant
-----[8] Exception for Accrued Benefits in an ESOP
-----[9] Separate Accounts in Defined Benefit Plans
-----[10] Treatment of Death Benefits
-----[11] Payments Under Both a QJSA and a QPSA
-----[12] Marriage and Divorce
-----[13] Assignment or Transfer of Interest in a QJSA or QPSA
-----[14] QJSAs for Unmarried Participants
-----[15] Relative Values of QJSAs and Other Forms of Benefit
-----[16] Distribution of a QJSA or QPSA Contract
-----[17] Tax Planning for QJSAs and QPSAs
----------[a] Tax Deferral for Participants
----------[b] Tax Deferral for Surviving Spouses
----------[c] Planning with the QOSA
----------[d] Dealing with Refusal to Consent
----------[e] Marriage and Divorce Planning
----------[f] Planning for the QPSA
§ 2.12 Plan Distributions after Divorce or Separation (QDROs)
-----[1] QDROs Generally
-----[2] Qualified Retirement Plans Other than Governmental or Church Plans
----------[a] General Restrictions on QDRO Provisions
----------[b] QDRO Payments at Earliest Retirement Age
----------[c] Survivor Benefits for Former Spouse
-----[3] Qualified Governmental Plans, Qualified Church Plans, and Certain Section 403(b) Plans
-----[4] Rollovers by Divorced Spouse
-----[5] Payment to Spouse Under Pre-QDRO Orders
§ 2.13 State Community Property Laws Generally Overridden
§ 2.14 Assignment or Transfer of Interest in a Qualified Retirement Plan
§ 2.15 Life Insurance Contracts Purchased by Qualified Retirement Plans
-----[1] Treatment of Life Insurance Contracts Purchased by Qualified Retirement Plans
-----[2] Life Insurance Proceeds Paid Directly to Beneficiaries
-----[3] Life Insurance Proceeds Paid to the Plan
-----[4] Cost of Life Insurance Paid by a Plan
-----[5] Distribution of a Life Insurance Contract by a Plan
-----[6] Tax-Free Exchange of Distributed Life Insurance Contract for an Annuity
§ 2.16 Annuity Contracts Distributed by Qualified Retirement Plans
-----[1] Distribution of Annuity Contracts Generally
-----[2] Continuing Status of a Distributed Nontransferable Annuity
----------[a] When Distribution of Annuity Contract Remains Nontaxable
----------[b] Nontaxable Rollovers Involving 401 Annuity Contracts
----------[c] Alternate Conversion of a Distributing Plan to a Qualified Annuity Plan
----------[d] Allocating Plan Investment to Nontransferable Annuity Contracts
-----[3] Treatment of Distributions of Transferable Annuity Contracts
----------[a] Entire Value of Transferable Annuity Included in Gross Income
----------[b] Allocating Plan Investment to Transferable Annuity Contracts
----------[c] Tax-Free Exchange of Transferable Annuity Contract
§ 2.17 Plan Payments of Disability or Medical Benefits or Premiums
§ 2.18 Plan Loans to Retirees or Beneficiaries
-----[1] Tax Treatment of Plan Loans Generally
-----[2] Tax Treatment of Qualified Residential Loans
-----[3] Tax Treatment of Qualified 5-Year Term Loans
-----[4] Tax Treatment of the Repayment of Plan Loans
§ 2.19 Federal Government Retirement Plans for Civilian Employees
-----[1] Introduction to Federal Government Retirement Plans for Civilian Employees
-----[2] CSRS and FERS Benefits
----------[a] The Alternative Annuity Option
----------[b] Voluntary Contributions to CSRS or FERS
-----[3] TSP Distributions
-----[4] CSRS or FERS Disability Annuity
-----[5] Special FERS Death Benefit
-----[6] Survivors of Slain Public Safety Officers
§ 2.20 Retirement Plans for Members of the U.S. Military
§ 2.21 Fewer Restrictions on Church, Governmental, and Some 403(b) Plans
-----[1] Modification of Normal Requirements
-----[2] Meaning of the Term “Unrestricted Section 403(b) Plan”
§ 2.22 Exempt Charitable Organization as a Plan Beneficiary
§ 2.23 Income Tax Withholding from Plan Distributions
-----[1] Income Tax Withholding from Eligible Rollover Distributions
-----[2] Periodic Payments that Are Not Eligible Rollover Distributions
-----[3] Nonperiodic Payments that Are Not Eligible Rollover Distributions
§ 2.24 Certain Lump Sum Distributions to Retirees Born Before 1936
-----[1] Special Tax Treatment of Certain Lump Sum Distributions
-----[2] Definition of “Lump Sum Distribution”
-----[3] Meaning of “Taxable Lump Sum”
-----[4] Effect of Rollovers on Lump Sum Treatment
-----[5] Income Averaging Election for Lump Sum Using Special Tax Rates
----------[a] Nontransferable Annuity Contract Not Part of a Lump Sum Distribution
----------[b] Lump Sum Distribution Includes Nontransferable Annuity Contract
----------[c] Effect of State Community Property Laws on Income Averaging Computation
-----[6] Election of Special 20 Percent Tax Rate for Pre-1974 Amounts
----------[a] Treatment of Pre-1974 Portion
----------[b] Effect of the 20 Percent Rate Election on the Post-1973 Portion
-----[7] Lump Sum Distribution Received by Beneficiaries, Trusts, Etc.
----------[a] Election of Special Tax Computations for Lump Sum Distribution
----------[b] Lump Sum Distribution Received by Two or More Beneficiaries
----------[c] Entire Lump Sum Distribution Received by Two or More Trusts
-----[8] Effect of QDROs on Lump Sum Treatment
§ 2.25 Estate or Gift Tax Imposed on Plan Benefits
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§ 2.11 Minimum Surviving Spouse Benefits Required of Plans
-----[1] Planning Considerations Where Minimum Surviving Spouse Benefits May Be Required
-----[2] Plans Requiring Spousal Survivor Annuities
----------[a] Plans Requiring Spousal Survivor Annuities Generally
----------[b] Qualified Joint and Survivor Annuity (QJSA)
---------------[i] QJSA Defined
---------------[ii] QJSA Requirements Regarding Value, Marriage, Etc.
---------------[iii] When Plan Must Commence QJSA Payments
--------------------[A] Commencement of QJSA Payments Generally
--------------------[B] Retirement At a Plan’s Normal Retirement Age
--------------------[C] Retirement At a Plan’s Early Retirement Age
--------------------[D] Separation Before Reaching Early or Normal Retirement Age
---------------[iv] How QJSA Payments Are Taxed
---------------[v] Recovered and Unrecovered Investment in a QJSA
----------[c] Qualified Preretirement Survivor Annuity (QPSA)
---------------[i] QPSA Defined
---------------[ii] QPSA Requirements Regarding Payments, Marriage, Etc.
---------------[iii] When Plan Must Commence QPSA Payments
---------------[iv] How QPSA Payments Are Taxed
-----[3] Annuity Starting Date for a QJSA or QPSA
-----[4] Waiver of a QJSA or QPSA
----------[a] Waiver Period for QJSA or QPSA
----------[b] Extended Waiver Period for QJSA
----------[c] Spousal Consent Required
----------[d] Optional Forms of Benefit after Waiver of a QJSA
----------[e] Optional Spousal Annuity in Lieu of QJSA
----------[f] When Waiver Not Allowed
-----[5] Spousal Consent to Use Plan Benefits to Secure a Loan
-----[6] Consent When Spouse Unavailable or Incapacitated
-----[7] Exception for Profit-Sharing or Stock Bonus Plans
----------[a] When Spousal Annuity Requirements Do Not Apply
----------[b] Participant Waiver with Spousal Consent
----------[c] Plan Mergers, Spinoffs, and Similar Transfers
----------[d] Plan Distributions and Loans to the Participant
-----[8] Exception for Accrued Benefits in an ESOP
-----[9] Separate Accounts in Defined Benefit Plans
-----[10] Treatment of Death Benefits
-----[11] Payments Under Both a QJSA and a QPSA
-----[12] Marriage and Divorce
-----[13] Assignment or Transfer of Interest in a QJSA or QPSA
-----[14] QJSAs for Unmarried Participants
-----[15] Relative Values of QJSAs and Other Forms of Benefit
-----[16] Distribution of a QJSA or QPSA Contract
-----[17] Tax Planning for QJSAs and QPSAs
----------[a] Tax Deferral for Participants
----------[b] Tax Deferral for Surviving Spouses
----------[c] Planning with the QOSA
----------[d] Dealing with Refusal to Consent
----------[e] Marriage and Divorce Planning
----------[f] Planning for the QPSA
§ 2.12 Plan Distributions after Divorce or Separation (QDROs)
-----[1] QDROs Generally
-----[2] Qualified Retirement Plans Other than Governmental or Church Plans
----------[a] General Restrictions on QDRO Provisions
----------[b] QDRO Payments at Earliest Retirement Age
----------[c] Survivor Benefits for Former Spouse
-----[3] Qualified Governmental Plans, Qualified Church Plans, and Certain Section 403(b) Plans
-----[4] Rollovers by Divorced Spouse
-----[5] Payment to Spouse Under Pre-QDRO Orders
§ 2.13 State Community Property Laws Generally Overridden
§ 2.14 Assignment or Transfer of Interest in a Qualified Retirement Plan
§ 2.15 Life Insurance Contracts Purchased by Qualified Retirement Plans
-----[1] Treatment of Life Insurance Contracts Purchased by Qualified Retirement Plans
-----[2] Life Insurance Proceeds Paid Directly to Beneficiaries
-----[3] Life Insurance Proceeds Paid to the Plan
-----[4] Cost of Life Insurance Paid by a Plan
-----[5] Distribution of a Life Insurance Contract by a Plan
-----[6] Tax-Free Exchange of Distributed Life Insurance Contract for an Annuity
§ 2.16 Annuity Contracts Distributed by Qualified Retirement Plans
-----[1] Distribution of Annuity Contracts Generally
-----[2] Continuing Status of a Distributed Nontransferable Annuity
----------[a] When Distribution of Annuity Contract Remains Nontaxable
----------[b] Nontaxable Rollovers Involving 401 Annuity Contracts
----------[c] Alternate Conversion of a Distributing Plan to a Qualified Annuity Plan
----------[d] Allocating Plan Investment to Nontransferable Annuity Contracts
-----[3] Treatment of Distributions of Transferable Annuity Contracts
----------[a] Entire Value of Transferable Annuity Included in Gross Income
----------[b] Allocating Plan Investment to Transferable Annuity Contracts
----------[c] Tax-Free Exchange of Transferable Annuity Contract
§ 2.17 Plan Payments of Disability or Medical Benefits or Premiums
§ 2.18 Plan Loans to Retirees or Beneficiaries
-----[1] Tax Treatment of Plan Loans Generally
-----[2] Tax Treatment of Qualified Residential Loans
-----[3] Tax Treatment of Qualified 5-Year Term Loans
-----[4] Tax Treatment of the Repayment of Plan Loans
§ 2.19 Federal Government Retirement Plans for Civilian Employees
-----[1] Introduction to Federal Government Retirement Plans for Civilian Employees
-----[2] CSRS and FERS Benefits
----------[a] The Alternative Annuity Option
----------[b] Voluntary Contributions to CSRS or FERS
-----[3] TSP Distributions
-----[4] CSRS or FERS Disability Annuity
-----[5] Special FERS Death Benefit
-----[6] Survivors of Slain Public Safety Officers
§ 2.20 Retirement Plans for Members of the U.S. Military
§ 2.21 Fewer Restrictions on Church, Governmental, and Some 403(b) Plans
-----[1] Modification of Normal Requirements
-----[2] Meaning of the Term “Unrestricted Section 403(b) Plan”
§ 2.22 Exempt Charitable Organization as a Plan Beneficiary
§ 2.23 Income Tax Withholding from Plan Distributions
-----[1] Income Tax Withholding from Eligible Rollover Distributions
-----[2] Periodic Payments that Are Not Eligible Rollover Distributions
-----[3] Nonperiodic Payments that Are Not Eligible Rollover Distributions
§ 2.24 Certain Lump Sum Distributions to Retirees Born Before 1936
-----[1] Special Tax Treatment of Certain Lump Sum Distributions
-----[2] Definition of “Lump Sum Distribution”
-----[3] Meaning of “Taxable Lump Sum”
-----[4] Effect of Rollovers on Lump Sum Treatment
-----[5] Income Averaging Election for Lump Sum Using Special Tax Rates
----------[a] Nontransferable Annuity Contract Not Part of a Lump Sum Distribution
----------[b] Lump Sum Distribution Includes Nontransferable Annuity Contract
----------[c] Effect of State Community Property Laws on Income Averaging Computation
-----[6] Election of Special 20 Percent Tax Rate for Pre-1974 Amounts
----------[a] Treatment of Pre-1974 Portion
----------[b] Effect of the 20 Percent Rate Election on the Post-1973 Portion
-----[7] Lump Sum Distribution Received by Beneficiaries, Trusts, Etc.
----------[a] Election of Special Tax Computations for Lump Sum Distribution
----------[b] Lump Sum Distribution Received by Two or More Beneficiaries
----------[c] Entire Lump Sum Distribution Received by Two or More Trusts
-----[8] Effect of QDROs on Lump Sum Treatment
§ 2.25 Estate or Gift Tax Imposed on Plan Benefits
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The author intends that this website provide accurate and authoritative information on the subject
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
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