If you’re the spouse of a deceased participant in a pension plan, you may be entitled to receive Qualified Preretirement Survivor Annuity (QPSA) benefits, which are guaranteed survivor payments, even if your spouse passed away before starting retirement payments.
Qualified Preretirement Survivor Annuity (QPSA)
QPSA is a monthly pension benefit paid to the surviving spouse of a vested participant who dies before retirement payments begin.
- This benefit is guaranteed by law.
- Provides an ongoing survivor benefit to the spouse, typically a portion of the participant’s accrued benefit, for the remainder of the spouse’s life.
- The amount and start date of the benefit follow the rules of the specific pension plan.
Understanding when QPSA benefits begin
- The surviving spouse can choose to begin payments any time on or after the earliest date allowed by the plan.
- The required beginning date for a QPSA is December 1 after the participant would have reached their mandatory retirement age.
Plans with employee contributions
If the pension plan includes mandatory employee contributions, the survivor benefit will be based on both employer and employee contributions, excluding any amounts the participant withdrew.
If the participant was disabled
QPSA coverage continues until the participant starts disability or retirement payments. Whether the disability benefit affects QPSA coverage depends on plan rules and IRS guidelines.
Special cases and rules
QPSA charges
Some plans charge for QPSA coverage:
- These charges are deducted from monthly benefits.
- If the participant died on or after the Date of Plan Termination (DOPT), no additional QPSA charges are assessed. Pre-DOPT charges still apply.
- If death occurred before DOPT, some charges may still apply if the plan required.
Marriage requirements
Some plans require the participant to have been married for at least one year before death for the spouse to qualify for QPSA benefits.
Plans without QPSA
Even if a plan did not include a QPSA benefit, PBGC will provide a minimum guaranteed QPSA, as required by law, at no cost.
Lump sum payments instead of QPSA
If the participant was due a small lump sum
- If the participant dies before payments begin, and the lump sum value of his/her annuity benefit was $5,000 or less (or $7,000 or less for plans ending after January 1, 2024), a lump sum is paid to the designated beneficiary. There is no QPSA payable.
- The spouse cannot choose to receive monthly QPSA payments instead.
If the surviving spouse’s QPSA adds up to a small total amount
- If the total value of annuity payments due a surviving spouse under a QPSA is $5,000 or less (or $7,000 or less for plans ending after January 1, 2024), PBGC may pay the benefit as a lump sum.
- The spouse can choose monthly payments instead.
If retirement was already elected
If the participant chose a joint annuity that continues at least 50% of the benefit to the spouse after their death, that form of benefit will be treated as a QPSA if the participant passes away after applying for but before starting payments.