What Is a Qualified Joint and Survivor Annuity (QJSA)?

Planning for retirement involves making decisions that ensure financial security for both you and your spouse. Employer-sponsored retirement plans include protections to provide ongoing income to a surviving spouse. One such protection is the Qualified Joint and Survivor Annuity (QJSA), which guarantees continued payments after the participant’s death.

Understanding how this annuity works helps couples make informed choices about their retirement benefits.

Eligibility and Legal Requirements

Federal law mandates that certain employer-sponsored retirement plans, particularly defined benefit plans and some defined contribution plans, offer a Qualified Joint and Survivor Annuity (QJSA) as the default payout option. This requirement, established under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code, ensures married participants receive benefits designed to provide ongoing income to their spouse. Employers must comply with these regulations to maintain their plans’ tax-qualified status.

Defined benefit plans must always provide a QJSA, while defined contribution plans, such as 401(k)s, are only subject to this rule if they offer annuity options. If a plan does not include annuities, the QJSA requirement does not apply. When annuities are offered, the QJSA must provide lifetime payments to the participant, with at least 50% of that amount continuing for the surviving spouse. Some plans allow for a higher survivor percentage.

Employers must provide clear, written disclosures about the QJSA option, including how benefits are calculated and the financial impact of selecting or waiving it. These disclosures must be given at least 30 days before annuity payments begin, allowing participants time to review their options.

Spousal Consent and Waiver

If a participant wants to waive the QJSA in favor of another payout option, federal law requires written spousal consent. This safeguard prevents one spouse from making decisions that could leave the other without financial support. The consent must be voluntary, in writing, and witnessed by a notary public or plan representative. Without it, the default QJSA remains in place.

This requirement ensures spouses are not unintentionally excluded from retirement income. If a participant opts for a single-life annuity or lump sum, the surviving spouse could be left without ongoing payments. By requiring consent, the law guarantees both spouses understand and agree to any changes.

Plan administrators must provide disclosures outlining the consequences of waiving QJSA protections, including differences in payment amounts and the potential loss of survivor benefits. Participants and their spouses must have at least 30 days to review this information before making a final decision. Some plans allow a shorter review period if both spouses agree, but it cannot be less than seven days.

Payment Structures

A Qualified Joint and Survivor Annuity (QJSA) offers different survivor benefit options, which impact the participant’s initial monthly payment. Higher survivor benefits result in lower initial payments, while lower survivor benefits provide higher payments during the participant’s lifetime. Choosing the right option requires balancing immediate financial needs with long-term security.

50% Survivor Option

This option provides the surviving spouse with 50% of the participant’s annuity payments after the participant’s death. This is the minimum required under ERISA and the Internal Revenue Code. Since only half of the original payment continues, the participant’s initial monthly benefit is higher than with options offering a greater survivor percentage.

For example, if a participant’s annuity payment is $3,000 per month, the surviving spouse would receive $1,500 per month. This option may work for couples where the surviving spouse has other income sources, such as Social Security or personal savings. However, if the surviving spouse depends heavily on the annuity, this option may not provide enough financial support.

75% Survivor Option

With this option, the surviving spouse receives 75% of the participant’s annuity payments. Because the plan must pay a higher percentage to the surviving spouse, the participant’s initial monthly benefit is lower than with the 50% option.

For example, if the participant’s annuity payment is $3,000 per month, the surviving spouse would receive $2,250 per month. This option is often chosen when the surviving spouse has limited additional income or higher expected living expenses. Financial planners may recommend it when the surviving spouse is significantly younger, as a longer payout period increases the need for sustained income.

100% Survivor Option

This option ensures the surviving spouse continues receiving the full annuity payment for life. Because the plan must guarantee the same payment amount for two lifetimes instead of one, the participant’s initial monthly benefit is lower than with the 50% or 75% options.

For example, if a single-life annuity would provide the participant with $3,500 per month, selecting a 100% survivor benefit might reduce the initial payment to $2,800 per month. After the participant’s death, the surviving spouse would continue receiving the full $2,800. This option is often chosen when the surviving spouse has little or no other income or when both spouses want to ensure financial stability regardless of who passes away first. While this option provides the highest level of security, it requires careful consideration of the trade-off between lower initial payments and long-term financial protection.

Distribution Timing

The timing of QJSA payments depends on the participant’s retirement date, plan rules, and federal regulations on minimum distributions. Most employer-sponsored retirement plans require participants to begin receiving benefits by April 1 of the year after they turn 73, following the SECURE 2.0 Act of 2022, which raised the Required Minimum Distribution (RMD) age from 72. However, some plans allow participants to defer annuity payments if they continue working beyond this age.

Defined benefit plans generally require annuity payments to start once the participant elects retirement benefits. Defined contribution plans offering annuities may provide more flexibility, but participants should check their plan’s specific terms. Some plans impose deadlines for electing payout options, and missing these deadlines could result in automatic enrollment in the default QJSA structure.

Tax Considerations

The tax treatment of a QJSA depends on the type of retirement plan funding the annuity and whether contributions were made on a pre-tax or after-tax basis.

For annuities funded through traditional 401(k) plans or defined benefit pensions, payments are taxed as ordinary income when received. Since contributions to these plans are typically made on a pre-tax basis, all distributions—including those received by a surviving spouse—are fully taxable at the recipient’s income tax rate.

For annuities funded through Roth accounts, such as a Roth 401(k), distributions may be tax-free if the account has been open for at least five years and the participant has reached age 59½ before payments begin. In this case, both the participant’s and the surviving spouse’s annuity payments would be excluded from taxable income. However, if the Roth account does not meet these requirements, a portion of the payments may be subject to taxation.

Understanding the tax implications of different funding sources can help participants and their spouses plan for retirement income more effectively.