Qualified Joint and Survivor Annuity: Rules, Waivers, and Taxes

A qualified joint and survivor annuity, or QJSA, is the default pension payout that pays you monthly for the rest of your life and then continues paying your surviving spouse a set percentage of that amount for the rest of theirs. Federal law makes it automatic for pensions and certain other employer retirement plans, and you cannot switch to any other payment form unless your spouse gives written, witnessed consent. The survivor percentage is set by the plan and must fall between 50% and 100% of your own benefit, with most plans defaulting to 50%.¹

How the Payments Work

You get a check every month for as long as you live. When you die, the payments don’t stop. Your surviving spouse begins receiving a percentage of what you had been getting, and those payments continue for the rest of their life.¹

The tradeoff is a smaller check while you’re alive. Because the annuity is designed to cover two lifetimes, your monthly payment is actuarially reduced compared to a single life annuity from the same plan. A 50% survivor option cuts less from your check than a 100% option, but leaves your spouse with less income after you die.

Federal law requires the QJSA to be the actuarial equivalent of the single life annuity the plan offers. The total expected value of payments across both lives equals the total expected value of the single-life payout, calculated using joint life expectancy tables and interest rate assumptions.²

Which Plans Have to Offer a QJSA

The QJSA requirement applies to every defined benefit pension plan, every money purchase pension plan, and any other defined contribution plan subject to minimum funding rules. If you’re married, vested, and in one of these plans, the QJSA is your default benefit form and you cannot be paid any other way unless you and your spouse formally waive it.³

Most 401(k) plans and profit-sharing plans are exempt, but only if all three of the following are true: the plan pays your entire vested account balance to your surviving spouse at your death (unless your spouse consents to a different beneficiary); the plan either doesn’t offer a life annuity or you haven’t elected one; and your account doesn’t include assets transferred in from a plan that was subject to the survivor annuity rules. If any one of those conditions fails, QJSA rules apply to your 401(k) too.³

A plan can also impose a marriage-duration requirement of up to one year. A spouse married to you for less than a year as of the annuity starting date may not be entitled to the survivor benefit.⁴

Small accounts get an exception. If the present value of your vested benefit is $7,000 or less, the plan can pay you a lump sum without going through the QJSA process and without spousal consent. That threshold was raised from $5,000 to $7,000 by the SECURE 2.0 Act for distributions made after December 31, 2023.

Waiving the QJSA and What Your Spouse Has to Sign

If you want any payment form other than the default QJSA, both of you have to follow a specific process. The plan administrator gives you a written explanation of the QJSA, what you’d receive under it, the financial effect of waiving it, and your right to choose an alternative. You then have until the annuity starting date to elect a waiver, and the election window opens 180 days before that date.²

The waiver only works if your spouse signs a consent form agreeing to the specific alternative you chose, and that signature has to be witnessed by a notary public or a plan representative. A signature without proper witnessing is invalid.⁵

The consent has to be specific. Your spouse doesn’t sign a blanket waiver that covers whatever you might pick. If you later change your mind and want a different option, you generally need a fresh spousal consent for the new election.

The Physical Presence Rule

Under the current Treasury regulations, the witnessing has to happen with your spouse physically present in front of the notary or plan representative. Remote notarization over video does not satisfy the permanent rule. The IRS granted temporary relief allowing live audiovisual witnessing during the pandemic, but that relief expired in mid-2021.⁶ In late 2022 the IRS proposed making remote audiovisual witnessing a permanent option for plans that choose to offer it, but that proposal has not been finalized. Until it is, the default requirement is in-person witnessing.

Your Options Once the QJSA Is Waived

After a valid waiver, you can pick from whatever other payment forms the plan offers. The common ones are:

A single life annuity, which pays the highest monthly amount because it only covers one lifetime. Payments stop completely when you die.
A joint and survivor annuity at a different survivor percentage. Many plans offer 75% or 100% options beyond the standard 50%. A 100% option means your spouse keeps receiving the exact amount you were getting, but your check while alive is the smallest of all the annuity choices.
A lump sum distribution, if the plan allows one. This requires the same spousal consent as any other waiver, and the plan calculates the amount using IRS-prescribed interest rates and mortality tables.

The Qualified Optional Survivor Annuity

Every plan subject to the QJSA rules also has to offer a qualified optional survivor annuity, or QOSA, as a built-in alternative. If the plan’s default QJSA pays less than 75% to the survivor, the QOSA has to offer a 75% survivor benefit. If the default QJSA pays 75% or more, the QOSA has to offer 50%. Either way, you always have at least two joint-and-survivor percentages to choose between.²

If You Die Before Payments Start

The QJSA covers what happens if you die after payments begin. A separate benefit, the qualified pre-retirement survivor annuity (QPSA), covers death before payments start. Any plan subject to the QJSA rules must also provide a QPSA, which pays your surviving spouse an annuity if you die while still working or after leaving your job but before your benefits begin.³

Waiving the QPSA follows the same rules: written spousal consent witnessed by a plan representative or notary. The $7,000 small-balance exception applies here too.

Divorce, Remarriage, and QDROs

Divorce doesn’t automatically end a former spouse’s right to your survivor annuity. A qualified domestic relations order (QDRO) issued in a divorce can require the plan to treat your former spouse as your surviving spouse for QJSA and QPSA purposes. When it does, your current spouse cannot be treated as the surviving spouse to the extent the QDRO covers the benefit.⁷

If a QDRO names your former spouse, the plan has to pay in the QJSA form unless the former spouse consents to a different option. Your new spouse’s consent doesn’t override that. Remarriage alone doesn’t redirect survivor benefits to a new spouse when a QDRO is in place, so reviewing the order’s scope with the plan administrator and a family law attorney is worth doing before you retire.¹

How the Payments Are Taxed

QJSA payments are taxed as ordinary income in the year you receive them. If you never made after-tax contributions to the plan, every dollar is fully taxable. If you did make after-tax contributions, part of each payment represents the return of those contributions and is tax-free, and the rest is taxable.⁸

The plan or insurance company withholds federal income tax from each payment. You can adjust withholding with Form W-4P, or request none. If you don’t submit the form, the payer withholds as if you’re single with no adjustments.⁸

The same treatment applies to your spouse’s survivor annuity after your death. Those payments are reported on a separate Form 1099-R issued to your spouse and included in your spouse’s income. If either of you begins receiving payments before age 59½, the taxable portion may also be subject to a 10% early distribution penalty unless an exception applies.⁸

1
Internal Revenue Service. Retirement Topics – Qualified Joint and Survivor Annuity
2
Office of the Law Revision Counsel. 26 USC 417 – Definitions and Special Rules for Purposes of Minimum Survivor Annuity Requirements
3
Office of the Law Revision Counsel. 26 USC 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
4
eCFR. 26 CFR 1.401(a)-11 – Qualified Joint and Survivor Annuities
5
eCFR. 26 CFR 1.401(a)-20 – Requirements of Qualified Joint and Survivor Annuity and Qualified Preretirement Survivor Annuity
6
Internal Revenue Service. Notice 2021-03 – Extension of Temporary Relief from the Physical Presence Requirement for Spousal Consents Under Qualified Retirement Plans
7
Department of Labor. QDROs – The Division of Retirement Benefits Through Qualified Domestic Relations Orders
8
Internal Revenue Service. Topic No. 410 – Pensions and Annuities