3799. What special rules apply to plans that are subject to QJSA and QPSA requirements?polearyrcline202005-04-08T19:45:00Z2015-07-20T13:38:00Z2015-07-20T13:38:00Z23992277Hewlett-Packard Company1852671142007-10-05T00:00:00ZTaxFactsDefaultArticleSite Map/Life Insurance/Income Taxation/Proceeds/Living/Disposition/Sale or Purchase of a Contract115140262-00-tf1.xml263.00;#2099;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 1If the owner of a life insurance or endowment contract sells the contract, such as in a life settlement, what are the income tax consequences to the seller?74200.0000000000TaxFactsDefaultArticleSBMEDIA\moss-admin2010-01-14T23:41:49Z3799. What special rules apply to plans that are subject to QJSA and QPSA requirements?For plan years beginning before January 1, 2008, the present value of the accrued benefit generally must be determined using the annual interest rate on thirty year Treasury securities for the month before the date of distribution. Temporary regulations permit the employer to base the determination on a monthly, quarterly, or annual interest rate. The rate may be determined using any month during a “stability period” of up to five months, provided the plan specifies the month that will be used. In any event, the interest rate must be determined in a consistent manner that is applied uniformly to all plan participants..IRC Sec. 417(e)(3), prior to amendment by PPA 2006; Treas. Reg. §1.417(e)-1(d)(4).In plan years beginning after December 31, 2007, the present value of the accrued benefit generally must be determined using a mortality table specified in regulations and an interest rate derived from a three segment yield curve, phased in over five years..See IRC Sec. 417(e)(3).Corrective distributions of excess deferrals, excess contributions, and excess aggregate contributions (Q 3705, Q 3733) from a 401(k) plan are not subject to the QJSA or spousal consent rules..Treas. Reg. §1.401(k)-2(b)(2)(vii)(A).Plans that offer plan loans (Q 3848 to Q 3854) and are subject to the QJSA requirements generally must provide that no portion of the accrued benefit of the participant may be used as security for any loan unless, at the time the security agreement is entered into, the participant’s spouse consents to the use of the accrued benefit as security..IRC Secs. 417(a)(1), 417(a)(4); Treas. Reg. §1.401(a)-20, A-24. If spousal consent is not obtained or is not required at the time benefits are used as security, it is not required at the time of any setoff of the loan against the accrued benefit, even if the participant is married to a different spouse at the time of the setoff..Treas. Reg. §1.401(a)-20, A-24(b).The IRS audits plans to determine if the consent rules have been met. Revenue Procedure 2013-12. 2013-4 I.R.B. 313. This was modified by Rev. Proc. 2015-27, 2015-16 I.R.B. 914 but not with respect to spousal consent explains the procedure to follow if distributions are made without spousal consent.The automatic survivor benefit rules generally do not apply to a beneficiary who murders his or her participant spouse..See Mendez-Bellido v. Board of Trustees of Div. 1181, 709 F. Supp. 329 (E.D.N.Y. 1989). See also, Let. Ruls. 8908063, 8905058. An employee’s widow convicted of his murder was held entitled to receive the preretirement annuity where applicable state law made her a constructive trustee of the annuity..George Pfau’s Sons Co. v. Neal, 665 NE 2d 68 (Ct. App. Ind. 1996).