Which retirement plans must provide both a qualified preretirement survivor annuity and a qualified joint and survivor annuity for a married plan participant?

Which retirement plans must provide both a qualified preretirement survivor annuity and a qualified joint and survivor annuity for a married plan participant?

• A. Traditional defined benefit pension plan.
• B. Profit-sharing plan.
• C. Cash balance pension plan.
• D. Target benefit pension plan.

Answer: (D)

The requirement for retirement plans to provide both a qualified preretirement survivor annuity and a qualified joint and survivor annuity is specifically applicable to defined benefit pension plans, which includes target benefit pension plans. These requirements are put in place to protect the spousal rights of a married participant. In a target benefit pension plan, while it operates similarly to a defined contribution plan by targeting a specific retirement benefit, it is structured as a defined benefit plan regarding the benefits promised at retirement. This structure means that it carries the same requirements as other defined benefit plans when it comes to survivor benefits. Therefore, a target benefit pension plan must offer the qualified preretirement survivor annuity and the qualified joint and survivor annuity to ensure that the spouse of a deceased participant is provided financial security. On the other hand, options like traditional defined benefit pension plans also have similar obligations regarding these survivor benefits, but the phrasing of the question implies a certain emphasis on how integrated these plans are in terms of providing such required benefits, which the target benefit clearly encapsulates due to its unique benefit structure. Profit-sharing and cash balance pension plans do not carry these requirements because they are generally designed differently, focusing on participant contributions rather than guaranteed benefits.

The requirement for retirement plans to provide both a qualified preretirement survivor annuity and a qualified joint and survivor annuity is specifically applicable to defined benefit pension plans, which includes target benefit pension plans. These requirements are put in place to protect the spousal rights of a married participant.

In a target benefit pension plan, while it operates similarly to a defined contribution plan by targeting a specific retirement benefit, it is structured as a defined benefit plan regarding the benefits promised at retirement. This structure means that it carries the same requirements as other defined benefit plans when it comes to survivor benefits. Therefore, a target benefit pension plan must offer the qualified preretirement survivor annuity and the qualified joint and survivor annuity to ensure that the spouse of a deceased participant is provided financial security.

On the other hand, options like traditional defined benefit pension plans also have similar obligations regarding these survivor benefits, but the phrasing of the question implies a certain emphasis on how integrated these plans are in terms of providing such required benefits, which the target benefit clearly encapsulates due to its unique benefit structure. Profit-sharing and cash balance pension plans do not carry these requirements because they are generally designed differently, focusing on participant contributions rather than guaranteed benefits.