Massachusetts Life Producer Practice Exam

Which statement is true regarding survivor benefits under a qualified retirement plan?

1. They can be waived without consent

2. They can be paid in any form

3. They can only be waived with the consent of a married employee's spouse

4. They are automatically included in the plan

The correct answer is: They can only be waived with the consent of a married employee's spouse

Survivor benefits under a qualified retirement plan typically have specific regulations to protect the rights of spouses, particularly in the context of defined benefit plans and defined contribution plans like 401(k)s. The correct assertion indicates that survivor benefits can only be waived with the consent of a married employee's spouse. This provision is mandated by federal laws, specifically the Employee Retirement Income Security Act (ERISA), which established guidelines to ensure that spouses of plan participants are informed and protected. The requirement for spousal consent reflects the understanding that many retirement plans operate on the basis of joint survivorship benefits, meaning that rather than simply passing on the account balance to a beneficiary of the participant's choosing (which could be anyone), the benefits are intended to secure financial support for the participant's spouse in the event of their death. This necessity for consent ensures that a spouse cannot be inadvertently disinherited from their rightful benefits accrued through the employee's contributions to the retirement plan. The other statements do not accurately represent the regulations surrounding survivor benefits. They may imply more flexibility or a lack of requisite consent that is not present in the established legal framework governing qualified retirement plans.