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Wrong distribution!


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What is the timeline here?  Did AP get a notice that the PA received a DRO or made a determination?

Once the court issues the DRO and it is sent to the plan, the plan is required to give you notice that they have received it (and some additional information).  The plan then determines if the DRO is qualified (a QDRO), and is required notify you of that determination.  If the DRO is a QDRO, it has to pay the AP according to the terms of the QDRO.

One QDRO can be very different from another, so it is impossible to say if someone is right or wrong without more information.  Can you give us more details of what the DRO required, when this took place, what kind of plan it was, etc?

 

 

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Is there no way to pay the AP with lost earnings or adjustment that works in the context of a DB plan?   You called it a pension so I am assuming DB plan and I am a DC guy.  

Because if there is a way to do that why worry about responsibility?  

If there is no plan or plan assets I get the concern but otherwise I see whose responsible as the wrong question.  

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4 hours ago, Big Question said:

The plan acknowledge receipt of the QDRO, but was "underfunded". Three years later, participant received a lump sum distribution and believed that AP received theirs. Five years later, AP says "I didn't get anything".

Anyone responsible?

You may need an ERISA attorney involved. But it sounds like the Plan Administrator (PA) incorrectly paid the APs portion of benefits assigned by the QDRO to the Participant. The PA would likely be on hook for making the AP whole and then trying to recover the over payment to the Participant on behalf of the Plan.

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The AP needs to file a claim for benefits in order to get benefits to which the AP is entitled.  The information provided doe s not assure that there was a QDRO or that the AP was entitled to anything.  It also does not allow an answer to the "Who is wrong?" question, although it appears, with only imagined doubt, that the participant is not involved.

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Was a certified copy of the QDRO send to the Plan Administrator? 

Did the Plan Administrator not only acknowledge receipt of the QDRO but send a written determination letter saying that the QDRO was approved, that is,  was "qualified"?  

Can you state the type of plan you are dealing with?  That is, a defined contribution plan like a 401(k) that is normally rolled over to or distributed to the Alternate Payee immediately after being approved by the Plan Administrator?  Or a defined benefit plan - a pension payable at retirement?

The term "underfunded" is not one that is used with a defined contribution plan?  But you said there was a lump sum contribution and that is consistent with a defined contribution plan, but could also be consistent with a defined benefit plan with a cash balance option.  

What happened after third year that generated the lump sum payment?  Retirement or termination of employment?   

Are you even sure you were dealing with a Plan subject to ERISA?  

So you have not provided enough information for anyone to help you.   

Sorry.  

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1 hour ago, fmsinc said:

Was a certified copy of the QDRO send to the Plan Administrator? 

Did the Plan Administrator not only acknowledge receipt of the QDRO but send a written determination letter saying that the QDRO was approved, that is,  was "qualified"?  

Can you state the type of plan you are dealing with?  That is, a defined contribution plan like a 401(k) that is normally rolled over to or distributed to the Alternate Payee immediately after being approved by the Plan Administrator?  Or a defined benefit plan - a pension payable at retirement?

The term "underfunded" is not one that is used with a defined contribution plan?  But you said there was a lump sum contribution and that is consistent with a defined contribution plan, but could also be consistent with a defined benefit plan with a cash balance option.  

What happened after third year that generated the lump sum payment?  Retirement or termination of employment?   

Are you even sure you were dealing with a Plan subject to ERISA?  

So you have not provided enough information for anyone to help you.   

Sorry.  

FMSINC fails to acknowledge the fact that defined benefit plans other than those that use a cash balance format may allow for lump sums. It has already been established that additional information is needed.

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