I have a scenario where numerous employees of a particular company have spouses who are citizens of Cuba. They would like to make their children who are legal U.S. citizens the beneficiaries to their retirement plan monies. Because the spouse is not a citizen or resident of the United States and probably never will come to the United States does she still have to give beneficiary waiver consent?

There's no specific dispensation that I can find to allow this. Closest I can come to is 1.401(a)-20, Q&A-27. An aggressive reading of this might permit the plan administrator to determine that the spouse "cannot be located." I'd be a little dubious about this myself, but I'd advise the plan administrator to check with competent ERISA counsel prior to making any such determination.

I have since discover that according to Senate Report 38.38, Page 1100 on May 27, 1986, the country the spouse is in is not relevant to the plan issue. The plan rules still apply from both IRS and DOL. A spouse would have to waive beneficiary rights and notorized by a foreign notary.