Is spousal consent required for distributions classified as corrective?

Spousal consent is not required for distributions that are classified as corrective because these distributions are intended to rectify errors or noncompliance issues related to the 401(k) plan. Corrective distributions typically address situations where contributions or allocations may have been incorrectly made, which can include eligible excess contributions or other mistakes that do not reflect a normal retirement distribution scenario.

The rationale behind this exemption lies in the nature of corrective actions; they are administrative in purpose and are designed to comply with regulatory requirements without creating additional benefits for the employee or reducing the spousal rights established under the plan. Therefore, spousal consent, which is primarily necessary for distributions that involve actual retirement benefits, is not applicable to corrective distributions. This principal understanding aligns with IRS guidelines regarding how to handle corrections in retirement plans, ensuring that plan compliance and participant resolutions are managed effectively without overcomplicating the process with additional consent requirements.