- 17 - participant’s spouse must consent in writing before the plan may distribute the present value of the participant’s QJSA. Under section 417(e)(3), as amended by the Uruguay Round Agreements Act, Pub. L. 103-465, sec. 767(a)(2), 108 Stat. 5038, the present value of a participant’s QJSA shall not be less than the present value calculated by using the applicable mortality table and the applicable interest rate. See also sec. 1.417(e)-1(d)(1), Income Tax Regs. Under section 417(e)(3)(A)(ii)(II), the term “applicable interest rate” means the annual interest rate on 30-year Treasury securities for the month before the date of distribution or such other time as the Secretary may by regulations prescribe. See also sec. 1.417(e)-1(d)(3), Income Tax Regs. Prior to its amendment by the Uruguay Round Agreements Act, section 417(e)(3) required retirement plans to calculate the present value of a participant’s QJSA using an interest rate assumption based on the rate that would be used (as of the date of distribution) by the PBGC for purposes of determining the present value of a lump-sum distribution on plan termination (PBGC interest rate). Section 417(e)(3), as amended, is effective for plan years beginning after December 31, 1994. Uruguay Round Agreements Act, Pub. L. 103-465, sec. 767(d)(1), 108 Stat. 5040. The amendment to section 417(e)(3) offered a financial benefit to sponsors of defined benefit plans by allowing them toPage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011