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Distribution to former spouse from a Governmental Plan


Guest Jhagan

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Guest Jhagan

We administer a governmental defined benefit plan that does not contain any QDRO language. We received a final judgement of dissolution that awards a wife of a plan participant that has not reached early or normal retirement age, but is vested in the plan. The judgement simply states the wife is given "one-half of the husband's retirement from the date of acquiring said retirement until the date of filing the Petition." When does the wife begin collecting the benefit? Do we require a QDRO & who prepares it? How do we calculate the 50%?

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The issue you have here is that although neither ERISA nor the Internal Revenue Code requires you to comply with a QDRO, ERISA does not preempt any state laws regarding domestic relations orders in the case of governmental plans. Thus, the issue would be whether the laws establishing your plan (either directly, or by permitting the adoption of a suitable plan document) would take priority over the domestic relations laws--a question that would be determined entirely under state law.

As a practical matter, what we normally do is to write back to whoever sent the order, and either say that the plan can't comply (citing whatever state statute or plan provision prohibits alienation of benefits) or that the plan needs more guidance before it can comply. Even if there is already an order out there, in most instances the order can be amended. And in general, a domestic relations attorney would prefer to work with you to come up with a reasonable order than to try to get involved in litigation with the plan.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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