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Guest KCW

QDRO - Death of Participant

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Regarding a qualified governmental (non-ERISA state & local) DB plan:

Most DB separate interest QDROs I've looked over have inadequate provisions for what will happen upon the death of the participant.

Is there any assumption regarding whose life (alternate payee's or participant's) is to be used as the "default" "Measuring Life"?

Note:

* Assume the QDRO either says nothing about what happens if the participant dies before or after benefits begin, states that if the participant dies before the alternate payee receives all of his or her benefit payments, the remainder the alternate payee's benefits are to be paid as a "death benefit".

* Assume the QDRO was "accepted" by the Plan's former TPA over ten years ago.

* The order is clearly a separate interest QDRO that meets all IRC QDRO requirements.

* The Plan is silent as to any treatment of QDROs except that QDROs are the exception to the Plan's anti-assignment provision.

* The Plan Administrator's written QDRO procedures are silent about what is to be done when a participant dies.

Absent any written instructions from the QDRO, the Plan document, or the Plan Administrator, is it assumed benefits follow the participant's life, or will the Plan administrator have to ask the parties to bring back an amended order every time a participant predeceases an alternate payee?

(I will contact a benefits attorney about this, but I'd like to hear some outside opinions as well--supposedly, these QDROs were reviewed years ago by attorneys and actuaries)

Also, the Plan recognizes QPSA and QJSA rights of spouses. Can a QDRO make an alternate payee the participant's (remarried at time of retirement) beneficiary without saying specifically that the alternate payee is to be treated as the participant's spouse, or that the alternate payee is assigned any subsequent spouse's right to be beneficiary?

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I know little about QDROs, even less about the effect of a QDRO upon a governmental plan, but my approach is always to question how the QDRO can "force" the plan to pay out differently than what the plan's distribution provisions allow.

Another minor point, regarding your second bullet, I always refuse to deem a QDRO a valid QDRO, except to recommend that the Sponsor accept the QDRO based on my review against a checklist that is drawn up by an attorney. In this context, it's then reasonable to say that the TPA recommended acceptance of the QDRO.

Maybe it would be a good strategy to call up the attorney's listed on the QDRO, and ask that they clarify what the original intention was?

Bill

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