Understanding Qualified Preretirement Survivor Annuity [Internal Revenue]: A Comprehensive Guide
Definition & meaning
A qualified preretirement survivor annuity is a type of financial arrangement designed to provide income to the surviving spouse of a participant in a pension plan. This annuity ensures that the surviving spouse receives payments that are at least equal to what they would have received under a qualified joint and survivor annuity if the participant had retired just before their death. The payments begin no later than the month the participant would have reached their earliest retirement age, ensuring financial support for the surviving spouse during a critical time.
Legal use & context
This term is primarily used in the context of pension and retirement plans governed by federal tax laws. It is relevant in areas such as estate planning and family law, particularly when addressing the financial rights of surviving spouses. Understanding qualified preretirement survivor annuities is essential for individuals involved in retirement planning or those managing the estate of a deceased participant. Users can access legal templates through US Legal Forms to create necessary documents related to this annuity.
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) John, a participant in a pension plan, passes away just before reaching retirement age. His surviving spouse, Mary, is entitled to a qualified preretirement survivor annuity. This means Mary will receive monthly payments that equal or exceed what she would have received had John retired the day before his death.
Relevant laws & statutes
The primary legal reference for qualified preretirement survivor annuities is found in 26 USCS § 417 of the Internal Revenue Code. This statute outlines the requirements and provisions for survivor annuities in pension plans.