Revision of Pension Forms for Relative Value Delayed

Qualified pension plans have long been required to provide notices to participants explaining the qualified joint and survivor annuity (QJSA) and any rights to waive it in favor of optional forms of distribution. In late 2003, the IRS issued final regulations requiring that the QJSA explanation include a detailed description of the relative values of any optional forms of distribution available to a participant, as compared to the QJSA. The “relative value” regulations were scheduled to apply to explanations of the qualified pre-retirement survivor annuity (QPSA) effective July 1, 2004 and to explanations of the QJSA effective for annuity starting dates beginning October 1, 2004. In response to an outcry from employers and consultants, in late June 2004, the IRS announced a delay in most aspects of the regulations. This Management Alert describes briefly what the regulations require and when pension distribution forms will need to be revised.