blguest

You are right about an uninformed administrator QDROphliIe, and that does happen with admins who don't read very well beyond their model orders, but the uninformed party in this instance isn't the plan admin, it's the plan's counsel. When I pointed out to plan counsel that the order divides the already-reduced benefit into 50% pieces and leaves the existing SB alone, they agreed they understood that, but then insist that the 100% SB, (the cost having already been deducted from the benefit) must be only 50%. They want a result in which the AP's 100% SB magically becomes 50% of the as-paid benefit. And they're not arguing that's what the QDRO provides, they're arguing instead that that's what the plan rules require. I don't conclude the plan is wrong in its general understanding of a how a 100% J&SA works, only that they defined it one way in the participant's benefit statement and in the plan document, but then attempt to claw it back if a QDRO divides the remaining benefit. The order's provisions define the SB separately from the "Member Benefit" (which I did not include in my cites of it above), so unless plan counsel is illiterate, they are deliberately ignoring it. I think your synopsis of what you rightly term the ignorant view would be correct in a case in which it is clear a plan is misreading how a particular QDRO assigns a benefit. Here, however, it is clear from plan counsel's letters that they fully understand but are refusing to apply it, arguing that nonexistent plan provisions mandate the reduction of an existing 100% J&S if a QDRO assigns any other part of the benefit. I know it's hard to wrap one's head around, primarily because it's complete hogwash, not to mention patently wrongful. And I will always avoid litigating if there is a better solution, which is why I'm posting, but so far I'm at a loss. The plan document lists the trustees but I haven't discovered who may be an actuarial advisor, or I would have reached out to them already; and the plan is self-administered as far as I can tell. No 5500, of course, which would help. Sample of what should happen using imaginary numbers: 500 monthly annuity in pay status, already reduced to provide 100% SB 250 of that already-reduced annuity to AP via QDRO (only payable while the participant lives) 500 existing SB for AP if AP outlives participant (so not payable while the participant lives) What result the plan wants: 500 monthly annuity in pay status, already reduced to provide 100% SB 250 of that already-reduced annuity to AP via QDRO 250 reduced SB for AP 250 of the participant's monthly benefit reverts to the plan The plan just doesn't want to pay the full SB if there is QDRO affecting any other part of the benefit. One has to wonder why that might be, and none of the potential answers are pretty.

Hi fms and thanks for your thoughts. When the participant in this case retired (some 8 years ago, long before the divorce) and the plan provided him with an initial benefit statement, that statement showed the dollar amount of the 100% J&S spousal benefit was equal to the participant's monthly benefit, just as a 100% J&S should be, and of course the premium for that SB was duly deducted from his benefit. The plan document also describes a J&S similarly, but does not address how SBs are paid to former spouses or the effect of QDROs on existing J&S elections. So initially the plan did not appear to misrepresent the SB amount like the union plan you describe. Instead, they now want to divest my client of that SB, for the benefit in pay status -- if a QDRO will divide the benefit. Their claims re the language in the plan document (which doesn't address death benefits re former spouses beyond what I've quoted below) don't withstand even casual scrutiny. It doesn't take a math whiz (which I'm certainly not) to realize that the 50% they want to claw back, if a QDRO will affect the benefit, is money that will go straight into the plan's pocket. This even though the SB is highly likely under the plan's threshold for cashing out the benefit, and the parties are in their 80's. The relevant language in the plan document on payment of SBs to spouses is: The plan is organized as a trust under Missouri law, both the participant and alternate payee are Washington residents, and the plan document's provisions for inalienability cite 414(p) as the plan's guidepost for QDROs.

All good phraseology, QDROphile, but the issue isn't the shared benefit percentage payment, which they didn't argue with, it is the plan insisting on reducing the existing survivor benefit by half if the benefit is divided by QDRO. This is the chief reason for my throwing this out here for comments and ideas. (While I agree with your approach with respect to future increases, this plan forbids assignment of more than a portion of the "primary benefit" and will not qualify an order that does not limit, in explicit language, even incidental future benefit increases, which is the reason that language is there, as I would not have included it otherwise). The primary issue of preventing the plan from divesting my client of her existing SB remains. You said the plan is off track, and while I couldn't agree more, threatening litigation appears to be my only leverage here, though litigation is something my elderly client can ill afford. The result the plan wants is so inequitable, however, that I may sue them for her pro bono. While I have written many church plan QDROs without incident, this one stand alone among all in the last 25 years for a plan's breathtaking level of self-dealing. I have a feeling I may get more mileage by pointing to that self-dealing as indicative of a lack of ethical religious charity as professed by the synod and questioning their faith, though I don't share their brand of it. * Edited to add that the full SB is $126/mo for a client in her late eighties. I very much appreciate your comments and welcome others.

The sections of the order addressing form of payment and commencement are as follows: The Alternate Payee's shared interest benefit shall be paid to the Alternate Payee in such form as elected by the Member at the Member's benefit commencement, and the Alternate Payee may not elect any other form of benefit payment.... The Alternate Payee shall commence shared benefit receipt with the next benefit payment made following qualification of this Order....

Thank you for responding QDROphile. This church plan did not elect ERISA application. The relevant portion of the QDRO (defined terms are in CamelCase) assigning a portion of the current stream of payments is: The plan defines the primary retirement benefit as without adjustments such as COLAs. --- Edited to add that I have asked the plan to confirm that without a QDRO my client is the 100% joint annuitant, but that with a QDRO, the plan will reduce her SB to 50%. I have not receive\d a response.

While I have written thousands of QDROs, I have never run into this issue before, so anyone who might wade in here is welcome. DB church plan participant elected a 100% J&S. This elderly couple then divorced years after benefit commencement. My client is the former spouse joint annuitant for the benefit currently in pay status. Submitted a QDRO to the plan assigning my client (the AP) 50% of the benefit in pay status and confirming her 100% SB benefit already in place. The plan refused to qualify the order because they claim that per the plan document, as an AP, my client is only entitled to a 50% survivor annuity, notwithstanding the fact she is already a 100% joint annuitant. The language in the plan document does not directly address an in pay status survivor benefit for a former spouse who is already a joint annuitant. If the plan's interpretation of its document stands, the plan would benefit by divesting a current joint annuitant of their property as already paid for by the participant. Any thoughts?