Form of Alternate Payee’s Ben efit Payments A QDRO either may specify a par- ticular form in which payments are to be made to the alternate payee or may provide that the alternate payee may choose a form of benefit from among the options available to the participant. However, federal law provides that the alternate payee cannot receive payments in the form of a joint and survivor annuity with respect to the alternate payee and his or her subsequent spouse. The choice of the form of benefits should take into account the period over which payments will be made. For ex- ample, if the alternate payee elects to receive a lump sum payment, no further payments will be made by the plan with respect to the alternate payee’s interest. Any decision concerning the form of benefit should take into account the difference, if any, in the actuarial value of different benefit forms available un- der the plan. For example, as discussed above, a plan might provide an early retirement subsidy that is available only for payment in certain forms. In addition, the forms of benefit avail- able to the alternate payee may be limited by § 401(a)(9) of the Code, which specifies the date by which ben- efit payments from a qualified plan must commence and limits the period over which the benefit payments may be made. Section 1.401(a)(9)–1, Q&A H–4, of the Proposed Income Tax Regulations addresses the application of the required minimum distribution rules of § 401(a)(9) to payments to an alternate payee. The proposed regulation limits the period over which benefits may be paid with respect to the alternate payee’s interest. For example, the proposed regulation provides that distribution of the alternate payee’s separate interest will not satisfy § 401(a)(9)(A)(ii) of the Code if the separate interest is distrib- uted over the joint lives of the alternate payee and a designated beneficiary (other than the participant).
