RSG15812

Yes, this is a new discussion. It has nothing to do with the Mr. Green discussion. This one involves the Alternate Payee's claim for 50% marital share based on the fictitious Single Life Annuity amount and not the Stream of Payments Mr. Smith is actually receiving.

Mr. Smith is a Participant in a Defined Benefit retirement plan. Mr. Green was previously married, but this ended in divorce about 8 years ago. In the Settlement Agreement with his first wife she was awarded 50% marital share of his pension. He subsequently remarried about 5 years ago. Recently Mr. Smith filed for retirement and he chose a 50% JSA with his current spouse. Approximately 6 months after Mr. Smith’s retirement his former spouse filed a QDRO to the plan administrator asking for 50% of the marital share of Mr. Smith’s pension in a Stream of Payments. Her attorney, however, asked for a 50% marital share of the Single Life Annuity (SLA) amount, and not the marital share from the payments being received by Mr. Smith. His reasoning was that Mr. Smith's former spouse should not be subsidizing the JSA awarded to the current spouse. Mr. Smith’s attorney argued that Mr. Smith, because he was married when he retired, was required by ERISA law to select a 50% JSA naming his current wife as beneficiary, unless she declined the benefit in writing. The only other way in which the previous spouse would have had access to the SLA would have been with a selection of a “carve out” (separate interest) annuity through a QDRO submitted prior to Mr. Smith’s retirement. What happens in the situation where the ex-spouse believes her portion of the marital share should be based on the (fictitious) SLA rather than on the current payments being received by the Participant?

Mr. Green is a Participant in a Defined Benefit retirement plan. Mr. Green was previously married, but this ended in divorce about 11 years ago. In the Settlement Agreement with his first wife she was awarded 50% marital share of his pension as well as the option of the Survivorship Annuity of his pension if she would pay for it. He subsequently remarried about 9 years ago. When Mr. Green decided to retire he checked with the retirement plan administrator and was told that his former wife had neither filed a QDRO nor had she even contacted the plan. He then filed for retirement. He and his current spouse decided to choose a Single Life Annuity (SLA) to maximize his pension payout. His current spouse then signed a waiver of her right to the Joint Survivorship Annuity (JSA). A couple months after Mr. Green entered into retirement and was in pay status his former spouse submitted a QDRO to the plan administrator. In the QDRO she askied for 50% of the marital share of his pension AND the JSA she was awarded in their Settlement Agreement. According to ERISA law she has a right to the 50% marital share under a Stream of Payments methodology. In the Stream of Payments, the Alternate Payee (former spouse) will receive a percentage of the Participant's payment stream. When the Participant dies, however, the payment stream will cease. What is not clear in this situation is if the Alternate Payee has a right to the JSA that was waived by the current spouse. In the case where the current spouse chooses the JSA, the Alternate Payee does not have access to it because it is vested with the current spouse. What happens in the situation where the former spouse wants the JSA that has been refused by the current spouse, after the Participant is already in pay status?