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DRO & Divorce Stip


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I have begun to educate myself regarding DROs in relation to governmental pensions/retirement plans.  If I understand correctly, a DRO is based on what is written in the divorce stipulation.  If something is silent in the divorce stipulation can it be added to the DRO?  For example, if the divorce stipulation is silent on the issue of a survivorship pension for the alternate payee can it be added to the DRO? 

Thank you.  

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My understanding is that property settlements are much more important than a divorce proceeding.  Note that some people get separated, with a property settlement, but never divorced.  Not all property settlements contain the explicit information contained in a DRO/QDRO. 

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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Well, the DRO is an order of the court directing the division of qualified retirement plan assets - and a separation agreement or other "agreed to" division of property is usually incorporated into another order of the court - granting the divorce or dissolution of marriage.  Fundamentally, it is possible that a DRO contains "an agreement" between the parties that is not contemplate by the "divorce stip" (in your parlance), but I wouldn't think it to be a good idea.  Consistency eliminates controversy, and if the DRO does something not in the stip, somebody may object, and then a hornet's nest get's kicked.

IF retirement benefits were inadvertently left out of the stip, I would suggest amending it, and then draft the DRO consistent with the amended stip.

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Thanks for the responses.  In my limited experience it would appear that the drafting of the DRO is critical.  If the alternate payee and/or his/her attorney is not familiar with the specific pension/retirement plan they may not really understand what they are agreeing to via the DRO.  Also, in some cases it would appear that the employee/participant may have "the upper hand" if he or she is the one hiring someone to prepare the DRO.  Is that true? 

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I wouldn't suggest the participant has any more information than the alternate payee - it's what you ask that determines the "upper hand."  DROs are complex.  Plans are complex.  Good attorneys get the right information before drafting or agreeing to a the terms of a DRO.

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I have no interest in preparing DROs.  I am only interested in analyzing the pension/retirement plans aspects of the DRO.  My target audience has fairly complicated governmental defined benefits plans and from my experience the majority of participants, some lawyers, and certainly alternate payees do not fully understand the intricacies of these plans.  Does anyone know if a "pension expert" is ever hired by an attorney to assist with the preparation of a DRO specifically in the area of retirement plans?  Any thoughts on the merits of the Certified Divorce Financial Analyst (CDFA) designation?  

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6 hours ago, mctoe said:

Any thoughts on the merits of the Certified Divorce Financial Analyst (CDFA) designation?  

I can't speak to the merits of the designation, but I have had a few run-ins with people holding the designation and they have been nightmares.  In those instances, the CDFA wouldn't know a QDRO if it bit them in the ass and they failed to comprehend the difference between Plan Administrator, RK, and TPA. 

Edit:  It is entirely possible I just had the misfortune of dealing with the bad apples, but my limited exposure has been pretty bad.

 

 

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