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Haven't you answered your own question? Doesn't the document effectively read: "Use comp without bonuses if 414(s) is satisfied, otherwise use comp with bonuses"?

Check the statute. My interpretation (and that of a number of court decisions) of the provision to the effect that the AP may be treated as a surviving spouse to the extent provided in the QDRO is that in a DB plan with a QPSA, the AP must be expressly awarded some interest in the survivor annuity or the AP will get nothing if the AP does not start benefits (the 50% portion of the pension benefit described in the post) before the participant dies. One way to look at it is that the death benefit is a different benefit that the regular benefit. If the AP is not awarded some of the death benefit, the AP gets none. While the proposition is untested, I think that the plan can adopt QDRO procedures that have a default to cover the failure to include a provision addressing death benefits (which is legal malpractice). For example, the QDRO Procedures can provide that, absent terms in the contrary in the QDRO, the result of failure to specify the AP's interest in the QPSA will be as suggested by Calavera: the AP will get the death benefit associated with the portion of the regular benefit awarded to the AP. I do not recommend such a provision on the QDRO procedures. What can be argued on behalf of the AP is that the AP should be compensated for receiving nothing from the plan by the malpractice insurance carrier of the AP's lawyer who failed to assure that the AP did not get stiffed (pun intended) by the pre-retirement death of the participant, to the delight and benefit of the subsequent spouse.

If no survivor benefits were included, and QDRO was written properly, death of the participant should not have any effect on the award benefit. Ex-wife should still be entitled to 50% of the portion of the pension earned during their marriage. New wife should be entitled to survivor benefit of the remaining pre-divorce and all post-divorce benefits. See if QDRO has any sections describing "If participant dies before commencement then..."

The following is how I understand this: 1. "Frozen" is irrelevant. You either pay benefits after rehire or you don't. The only difference between frozen and not frozen is that there is no accrual for the period of rehire. The suspension rules remain the same. 2. No proper notice should mean that you either keep paying or you actuarially adjust the amounts for the period of suspension. 3. The administration of the plan is required to be consistent with the plan document. If it was not done right this time, even without a VCP filing, you are acting in correction mode. Doing it wrong consistently does not change it from being wrong.