Qualified Pre-Retirement Survivor Annuity (QPSA)
What is a Qualified Pre-Retirement Survivor Annuity (QPSA)?
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).
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.