Jump to content

Complicated QDRO situation


Recommended Posts

The series of events is as follows: 1) the parties divorce, 2) a QDRO is filed with the court, 3) the parties re-marry each other, 4) participant dies, 5) widowed alternate payee  submits QDRO to the Fund for the first time after his death.

My only question is: does the existence of a valid QDRO nullify the J&S benefit to the AP?  Does she get both? 

Thank you

Link to comment
Share on other sites

  • david rigby changed the title to Complicated QDRO situation

Does (3) have any bearing on the 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.

Link to comment
Share on other sites

My guess is that the question is whether the QDRO is still valid. If it is, you follow it. If not, you don't. Assessing validity of QDRO probably starts with consulting a lawyer familiar with family law matters in state where H&W lived.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

Link to comment
Share on other sites

You didn't say so, but I assume that since you used the acronym "QDRO" this is an ERISA qualified plan and that you are not using "QDRO" generically.  If I am right, then when the Plan approves the QDRO it will be and the remarriage should not impact that.  The fact that you submitted the QDRO post mortem should not be a problem.  Under the Pension Protection Act of 2006.  See 29 CFR 2530.206(a) and (c)(1) and (2) Example 1.  

See also Thomas v. Sutherland at
http://scholar.google.com/scholar_case?case=5394115590738781251&q=29+CFR+2530.206%28c%29&hl=en&as_sdt=2,9 

and  Yale-New Haven Hospital v. Nicholls, 788 F.3d 79, 85 (2d Cir. 2015) where the Court held that two nunc pro tunc Orders issued after the death of the Participant were valid QDROs. 

And see Eller v. Bolton, 168 Md.App. 96, 895 A.2d 382 (2006) in which the CSA held that it was permissible for the trial court to enter a post-mortem QDRO following the death of the Alternate Payee.  

And Robinette v. Hunsecker, 212 Md.App. 76, 66 A.3d 1093, 293 Ed. Law Rep. 892, (2013), where the Court of Special Appeals used a theory of constructive trust to restore to the intended beneficiary survivor annuity benefits that were paid to the beneficiary named by the deceased employee in a Maryland State retirement plan.  The court also entered a posthumous “QDRO” which directed the payment of future survivor benefits to the former spouse.  Note that the Plan in this case was under the Maryland State Retirement and Pension System and not subject to ERISA. 

See also Griffin v. Griffin, 62 Va. App. 736, 753 S.E.2d 574 (2014) -
https://scholar.google.com/scholar_case?case=5601932368354380870&q=griffin+v.+griffin&hl=en&as_sdt=4,47.

  Another case worth reviewing is Rivera v. Lew, District of Columbia Court of Appeals, On Certification from the United States Court of Appeals for the District of Columbia Circuit, Case No. 14-SP-117, 99 A.3d 269 (2014). 

And Garcia-Tatupu v. NFL Player Retirement Plan, Civil Action No. 16-11131-DPW, United States District Court, D. Massachusetts (2017) that you can find at: https://scholar.google.com/scholar_case?case=13784574282734726035&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt.

And see Files v. ExxonMobil Pension Plan, 428 F. 3d 478 (Court of Appeals, 3rd Circuit 2005) 

So you have two theories, one under the PPA and one under a theory of a nunc pro tunc Order.

But in addition to all of the foregoing, if the parties remarried, depending on what action the husband may have taken, like naming the wife (again) as his survivor annuity beneficiary, or perhaps he did not delete her in the first place or failed to notify the employer of the divorce.  In all even ERISA will hold that by reason of her status as his wife is entitled to the survivor annuity benefit.  

Good luck.  

Link to comment
Share on other sites

I would treat it as if they are two different property interests that just happen to be going to the same person.

Proceed as if the alternate payee is Wife 1 and the surviving spouse is Wife 2.  Even though the same person is both Wife 1 and Wife 2.  Then determine whether the DRO is qualified.

Link to comment
Share on other sites

It's not clear the widow's best interest is served via using a QDRO.  Wouldn't her benefit be maximized by ignoring the 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.

Link to comment
Share on other sites

18 hours ago, david rigby said:

It's not clear the widow's best interest is served via using a QDRO.  Wouldn't her benefit be maximized by ignoring the QDRO?

I'm not sure of the details of this plan benefit or this DRO, and I am no actuary, but my first instinct was that it was probably going to be a bunch of work to get her the same dollar amount.  I am bad at the DB actuarial stuff, so I have to plead ignorance.  But despite my ignorance, I agree with your perspective that this QDRO seems to me like maybe it would not be helpful to her.

But if the plan qualifies the DRO, I think compliance is obligatory for the plan, isn't it?  The plan could tell the participant "if we use a QDRO, you get $X overall, and if you withdraw it, you get $Y" and then if X is better or worse than Y she could choose to withdraw the DRO or not.  But if it's valid and the plan qualifies it, and for some reason she had decided to proceed, then even if it's worse for her I think the plan still has to do it.

It's possible that the DRO will not be qualified anyway, depending on how it's structured and on the plan procedures.

Link to comment
Share on other sites

Chani: You have piqued my curiosity. Unless you think the QDRO is the result of a fraud on the court, this should be a simple matter. Call if you would like to discuss. QDRO almost certainly effects a net benefit to surviving spouse. I can probably quickly estimate net benefit depending on mortality table used, general annuity discount rate, which JSA percentage is assigned to SS (likely 50%), ages, any special early retirement benefit. If your calculations have resulted in a net increase in cost to sponsor as compared to participant survival, something is amiss.  Larry Gagnon 734-429-4054

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...