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When Must Participants Get Their Spouses To Sign-off On Changing 401(k) Elections?

DWC 04/3/18


One of our employees recently asked about changing his primary beneficiary on his 401(k) account. The beneficiary form says the participant must obtain the consent of his spouse in order to make the change, but when I called the company that manages our plan for us, I was told that spousal consent rules do no apply to our plan. Now, I am really confused.


Is a participant required to get the consent of his or her spouse when changing a beneficiary?


The beneficiary form and your plan provider are both correct. You are probably even more confused now, but it has to do with the fact that your provider’s response was incomplete. There are several instances in which spousal consent may be required. One applies across the board, and the other depends on the specific features you have in your plan. 

Beneficiary Designations

The law says that the default beneficiary for a married participant is his or her spouse. In order to protect the spouse from unknowingly being removed as primary beneficiary, it is a legal requirement that the spouse provide written consent for the change.

The requirement applies regardless of plan provisions and even in situations when the participant only wants to leave a portion of his or her account to someone other than a spouse.

Benefit Payments

The other main instance in which spousal consent may come into play is when a plan includes provisions that make a survivor annuity the default form of participant benefit payment. Prior to the early 2000s, all plans were required to make the annuity the default; however, a law change allowed many plans to get rid of that default in favor of a lump sum distribution. Note that all defined benefit plans (including cash balance plans) and money purchase pension plans (a special type of defined contribution plan) are still required to use the survivor annuity as the default.

Plans that include this type of annuity provision must require married participants to obtain spousal consent in order to elect a different form of benefit payment such as a lump sum. Taking it a step further, such plans are also required to obtain spousal consent for pretty much any transaction that involves money leaving the participant’s account, including participant loans. There is an exception if the participant seeking to make the change has a vested balance in the plan of less than $5,000.

General Comments

When spousal consent is required, it must be in writing, often right on the same form where the participant makes the election. Furthermore, the consent must either be notarized or witnessed by a plan representative in order to be valid. Since notary services are available in many easily accessible locations, such as banks, it is often more convenient for a participant to go that route than to bring his or her spouse to work to have a plan representative be the witness.

A common question that arises is whether spousal consent can be provided electronically. With most consents signed-off by a notary, the fact that electronic notarization is not yet permitted makes provision of electronic spousal consent pretty much impossible for all practical purposes.

For more information on beneficiary designations, please visit our Knowledge Center here.

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Topics: Question of the Week (QOTW), DWC, Beneficiary Designation, QJSA, QPSA, Spousal Consent


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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.