Qualified Pre-Retirement Survivor Annuity (QPSA)

Written By
Paul Tracy
Updated September 14, 2020

What is a Qualified Pre-Retirement Survivor Annuity (QPSA)?

A qualified pre-retirement survivor annuity (QPSA) is a company-sponsored death benefit that provides the employee's surviving spouse with an annuity payment should the employee die before receiving retirement benefits.

How Does a Qualified Pre-Retirement Survivor Annuity (QPSA) Work?

For example, let's assume that John works at Company XYZ, which has a pension plan. This defined benefit plan offers a QPSA, which means that if John dies before he retires or begins receiving retirement benefits from the pension plan, his wife, Jane, will receive the QPSA. 

The payment amount of the QPSA is calculated according to ERISA guidelines.

Why Does a Qualified Pre-Retirement Survivor Annuity (QPSA) Matter?

A qualified pre-retirement survivor annuity (QPSA) is a great benefit that offers financial security to an employee's family, much like life insurance. 

Defined benefit plans must offer QPSAs to employees who have contributed to them, but most defined contribution plans (such as 401(k) plans, profit sharing plans, etc.) do not if certain conditions are met. 

It should also be noted that spouses have to be married for at least one year in order to be eligible for benefits. A participant may waive a QPSA if the spouse consents (this often is the case if the participant wants to name an alternative beneficiary, such as a dependent).