A qualified joint and survivor annuity (QJSA) provides monthly retirement payments for you and your spouse after you die. Your surviving spouse will receive a QJSA payment of 50% to 100% of the monthly payment amount you received during your life for the rest of their life.
Learn more about how a qualified joint and survivor annuity works, its pros and cons, and other alternative payment forms.
Definition and Example of a Qualified Joint and Survivor Annuity
A qualified joint and survivor annuity (QJSA) pays you monthly lifetime benefits after you retire plus a lifetime monthly payment to a designated survivor after you die. (A survivor is a person who outlives you.)
Payments are most often made to your surviving spouse, but they may instead be made to a former spouse, child, or dependent who must be treated as a surviving spouse under a qualified domestic relations order (QDRO). A plan must let you receive a QJSA benefit payment when you reach the earliest retirement age listed in your plan.
- Acronym: QJSA
Let’s say you participate in a retirement plan that distributes a QJSA worth $500 with a 50% annuity for your spouse. Starting from your retirement date, you’ll receive $500 each month. When you die, the plan will pay your spouse $250 per month for the rest of their life.
The distribution of QJSA payments requires your written consent but not your spouse’s.
How a Qualified Joint and Survivor Annuity Works
Simply put, a joint and survivor annuity pays monthly retirement benefits to you while you’re alive and then to a survivor—typically your spouse—after you die. You, as the plan participant, receive monthly payments (an annuity) for the rest of your life. If you die before your spouse, they will receive QJSA payments between 50% and 100% of the monthly annuity payment you received when you were alive. The precise percentage the surviving person will receive in QJSA payments depends on the terms of the retirement plan.
Federal law mandates that qualified plans like defined benefit plans and money purchase plans provide QJSA benefits to all married participants except when the couple consents to another form of payment. You must submit the written consent within 180 days of when annuity payments should begin. If you take this route, your spouse’s consent must be voluntary since they’re essentially giving up their right to the QJSA benefits. If both spouses agree to forgo the QJSA benefits, they must elect a non-spouse beneficiary who will receive the payments.
You’ll receive your retirement plan benefits as a single-life annuity if you’re unmarried when the plan starts distributing the benefits—unless you choose a different payment form.
All qualified plans must inform you about your QJSA retirement benefit options and the consequences of any choices you make about them. The plan must also give you and your spouse two benefit notices before the plan distributes benefits. The notice that your plan provides should inform you and your spouse about:
- Your rights to receive a QJSA, have a qualified optional survivor annuity (QOSA), or receive other optional forms of benefits
- Your discretion to pick alternate beneficiaries
- Your joint spousal consent requirements
If you and your spouse divorce before annuity payments begin, your former spouse won’t be entitled to QJSA payments. The only exception to this is if your former spouse has a QDRO that protects their eligibility for QJSA payments.
If the divorced participant wants to elect a new recipient of the survivor benefits, say after remarrying, the retirement plan administrator must take part in picking a new beneficiary as per the plan’s rules.
A QDRO may not award an amount or form of benefit that the retirement plan doesn’t provide.
Pros and Cons of a Qualified Joint and Survivor Annuity
- Guarantees lifetime payments for two people
- Tax liabilities are spread out
- Can’t access lump-sum cash
- Lower monthly payments
- Guarantees lifetime payments for two people: A QJSA guarantees lifetime payments for the retirement plan’s participant and their spouse.
- Tax liabilities are spread out: Since the surviving spouse may receive benefits over time rather than in one lump sum, tax liabilities are spread out over a longer period.
- Can’t access lump-sum cash: A qualified joint and survivor annuity typically does not give the surviving spouse a lump-sum payment since benefits are paid monthly.
- Lower monthly payments: Although the surviving spouse will receive lifetime payments, the benefits paid to both the participant and survivor are lower than what the participant would receive without the survivor benefit. A surviving spouse may receive 50%-100% of what the plan participant received.
Alternatives to a QJSA Benefit Payment
With consent from your spouse, you can choose to have your own and your spouse’s benefits paid in a form different from the standard QJSA. These payment options may guarantee the participant higher retirement benefits when they are still alive and leave little to no benefits to their surviving spouse. QJSA alternative payment forms include:
- Single-life annuity: Retirement payments for life with no survivor payments.
- Two-life annuity: Retirement payments for life and pays survivor benefits to someone other than your surviving spouse.
- Fixed-period annuity: Monthly retirement benefits for a specific period of time even if you die before the period lapses. For example, some plans will make payments for 10 years. If you die after five years, your beneficiary would receive payments for the remaining five years in the period.
- Lump-sum payment: This provides only one payment, which is equal to the total value of your retirement account.
- A qualified joint and survivor annuity (QJSA) guarantees lifetime retirement benefits to a participant and a survivor annuity to their spouse.
- A surviving spouse will receive at least 50% of their deceased spouse’s monthly retirement benefit for the rest of their life.
- You can yield the standard form of QJSA payment and choose any optional payment form your plan avails, like a single-life annuity.