Academy Advises Policymakers on Range of Options to Address Gaps in Retirement Plans’ Spousal Benefit Protections 

WASHINGTON—The American Academy of Actuaries published a new issue brief outlining options that public policymakers and plan sponsors could consider to address various obstacles and gaps in spousal benefits protections offered within retirement plans.   

“Spousal benefits are intended to provide vital financial assurances in situations like a divorce or the death of a spouse, but there’s definite potential to make them more accessible and easier to exercise,” said Connie Rydberg, a co-author of the issue brief, Improving Spousal Retirement Plan Protections — Gaps and Policy Proposals and vice chairperson of the Academy’s Retirement Plan and Design Evaluation Committee which developed it.“Challenges and gaps in spousal benefit protections vary by plan type but range from the transparency and consent requirements regarding the disposition of retirement assets, to different coverage and administrative hurdles.” 

The issue brief and an accompanying infographic offer an objective, nonpartisan perspective on a range of options that could be considered when addressing the challenges within the spousal benefit framework, drawing on the U.S. actuarial profession’s knowledge and experience in the retirement space. Spousal benefits in retirement plans operate under a framework of federal and state laws, including the foundational federal Employee Retirement Income Security Act (ERISA), with spousal protection approaches differing among defined contribution (DC), defined benefit (DB), and individual retirement account (IRA) plans. Potential changes described in the issue brief include: 

• Improving spousal protections in DC plans and IRAs (including rollover IRAs) by, for example, requiring spousal consent for any distribution/loan/rollover from a DC plan to an IRA.  

• Improving spousal rights to retirement plan information.  

• Improving access to qualified domestic relations orders (QDROs), such as by providing increased guidance and simplified tools (e.g., model QDROs). 

• Exploring ways to protect spouses from fraud and coercion when consenting to forms of payment that do not provide spousal protections. 

• Encouraging state and local government retirement plans to provide spousal death benefits currently required under ERISA.  

• Expanding spousal benefit protections to legally recognized partners of unmarried participants. 

Read the issue brief and learn more about the Academy’s public policy work on retirement issues at actuary.org.

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The American Academy of Actuaries is a 20,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. For 60 years, the Academy has assisted public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.