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Modifying a QDRO post-death


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10 replies to this topic

#1 benpat3

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Posted 31 July 2007 - 04:33 PM

Can a QDRO be modified/interpreted after the Alternate Payee has died? The Participant thinks that he is entitled to something, which in and of itself is questionable and a whole other issue, but the participant wants to take the QDRO to the domestic relations court and have them modify/interpret the QDRO to reflect what he says was the intent of the QDRO. If this does not make much sense, then I guess, generally, can a QDRO be modified/interpreted post-death of the alternate payee?

Any ideas are welcomed.

Thanks

#2 Guest_named_mjb_*

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Posted 31 July 2007 - 05:24 PM

Q1 What is the modification that he seeks?

Q2 what type of plan is this?

Q3 Did the court reserve jurisdiction to change the terms of the QDRO after the divorce became final?

Q4 why didnt he have the QDRO modified before the AP's death?

#3 benpat3

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Posted 01 August 2007 - 09:55 AM

Q2- it is a DB plan
Q3 - yes
Q4 - issue just came about when alternate payee died and participant demanded money.

Q1 - Participant wants the Alternate payee's portion to revert back to the Participant. Plan provides 60 payments guaranteed, about 30 are remaining, and plan provides remaining goes to Alternate payee's beneficiary. No beneficiary card on file. QDRO states if AP predeceases participant the AP's portion of participants benefits shall become payable to participant. Participant looking to go to ct. to get QDRO modified/interpreted so that, at the very least the 30 remaining payment go to participant and at most the entire AP portion goes back to participant.

I know there are a myriad of issues in this situation but the only issue of concern to me on this post is can a QDRO be modified/interpreted after the AP has died? What are the rules, if any, applicable to a post-death modification of a QDRO? ( I am finding authority on modifying a QDRO and possibly modifying after the participants death, but not finding anything for after the AP dies). Do the same rules apply to when the AP dies as when the participant dies?

#4 QDROphile

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Posted 01 August 2007 - 10:23 AM

If you want a simple answer that is likely to be true even if it disregards relevant questions, the participant is out of luck. The participant cannot retrieve any benefits awarded to the alternate payee if payments have started.

#5 Guest_named_mjb_*

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Posted 01 August 2007 - 01:56 PM

Better read the QDRO again to see if it only permits payment to the employee if the AP dies before benefits commence to AP. If there is no designated bene, payment of AP benefits will be governed by plan default provisions.

#6 Mike Preston

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Posted 01 August 2007 - 02:04 PM

While I tend to agree with QDROPHILE on most things, there appears to be an ambiguity here. If the QDRO states that the participant is entitled to some portion of the AP's benefit, then the participant is entitled to some portion of the AP's benefit. Normally, I would expect that this sort of provision would apply to a benefit that is not yet in pay status. But I don't see any reason why it couldn't also, if drafted explicitly, apply to an AP's death benefit payable from the plan. In this case, the continuation of the payments for the guaranteed period (the remaining 30 months) seems like it is up for grabs. If the QDRO was intending to force the Alternate Payee to select the participant as the AP's beneficiary and this was "accomplished" by the AP not selecting a specific beneficiary on a plan beneficiary designation in the (possibly mistaken?) belief that the QDRO would then be interpreted as providing the intended result, there is definitely a controversy here.

I'm not sure whether interpleader is the correct course of action or whether there is another legal avenue that the plan and/or participant can or should pursue. That is a discussion reserved for an ERISA attorney.

But if a QDRO can state that an AP is the P's surviving spouse for ERISA purposes, it should be able to state that the P is to be the beneficiary of any death benefit payable to AP's estate.

#7 J Simmons

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Posted 01 August 2007 - 05:00 PM

The participant cannot retrieve any benefits awarded to the alternate payee if payments have started.


QDROphile: Does this yet hold true after the issuance of 29 CFR 2530.206©(1) and ©(2), Example (3)?
John Simmons
jsimmons@ida.net


Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

#8 Guest_named_mjb_*

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Posted 01 August 2007 - 06:27 PM

Interpleader is an expensive option for a plan to pursue. Inexpensive alternative is for plan to treat employee's request for AP's death benefits as a claim for benefits under the plan and apply the plan claims procedure. Before you can file the claim you need to see if state law allows modification of a QDRO after the death of one spouse.

#9 Mike Preston

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Posted 01 August 2007 - 06:51 PM

I don't disagree that following the plan's claim procedures may be the best course of action. However, if the claim involves interpreting the existing QDRO/plan language, I see no reason why modification of the QDRO is even on the table. If it isn't on the table, there is no reason to see anything about state law vis-a-vis modifying QDROs.

#10 QDROphile

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Posted 02 August 2007 - 09:00 AM

JSimmons:

The new regulation added absolutely nothing to the law. The Department of Labor went through a completely unhelpful exercise simply for the sake of form. In its defense, the statutory mandate was also vacuous, but the Department of Labor made absolutely no effort to address any interesting questions.

Mike Preston: I agree that an order would be qualified if drafted as you suggest. That is why I qualified my response. I am still willing to bet that the order is not drafted that way, and the question was whether or not the order be modified. Apart from state law concerns, the order could be modified to provide the remaining 30 payments to the participant. This is a test for those who believe in Hopkins v. AT&T, which I do not.

#11 Mike Preston

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Posted 02 August 2007 - 09:14 AM

Well, you and I are on opposite sides of the Hopkins issue. I just don't think we reach Hopkins at all if the DRO is a QDRO and it, by itself, provieds that the 30 remaining payments are already "owned" by the P. Hopkins stands for the presumption that if the DRO is silent on the issue and the plan has already established an unambiguous beneficiary with respect to the 30 payments remaining, and that beneficiary is not already P, no amount of post-death manipulation on the part of the court will result in an entitlement to those 30 payments for the P.