fmsinc

PLENTY OF PEOPLE LIVE AND WANT TO LIVE IN TRAILERS, MOBILE HOMES, GEODESIC DOMES, DOUBLE WIDES, RVS, MOTOR HOMES, CAMPERS, VANS, AND TENTS AND IT IS THEIR PRIMARY RESIDENCE AND, IF IT IS NOT AFFIXED TO THE GROUND, ALLOWS THEM TO TRAVEL IN ORDER TO CONDUCT THEIR BUSINESS. ONE MAN'S CEILING IS ANOTHER MAN'S FLOOR.

A participant and his spouse become divorced prior to the participant's annuity starting date under a defined benefit plan. I ASSUME THIS IS AN ERISA QUALIFIED PLAN AND THAT UNLESS WAIVED BY THE ALTERNATE PAYEE THE WIFE BECAME ENTITLED TO QJSA AND A QPSA, AND THAT THE ANNUITY PAID TO THE PARTICIPANT WAS REDUCED TO PAY THE COST OF THE QJSA AND QPSA. Unlike many plans, benefits are paid from current plan assets (instead of from annuity contracts purchased from an insurance company). I DON'T SEE WHY THIS MATTERS. The participant and his ex-spouse agreed upon a proposed division of his benefit, based upon the fraction of the months in which the couple was married over the participant's entire period of service with the employer. WHERE WAS THIS AGREEMENT LOCATED? IN A MARITAL SETTLEMENT AGREEMENT OR IN THE JUDGMENT OF DIVORCE ON IN THE 11 YEARS LATE QDRO? However, no formal QDRO was entered by a court until 11 years after the participant's annuity starting. THE PLAN IS NOT REQUIRED TO MAKE ANY PAYMENTS UNTIL IT RECEIVES AND HAS QUALIFIED A QDRO. Nevertheless, the participant commenced receiving reduced pension payments based upon the parties' agreed division as of his annuity starting date, in the form of a ten-year certain and life annuity. SO ARE YOU SAYING THAT THE WIFE WAIVED A QJSA AND A QPSA AND AGREED TO A TEN YEAR CERTAIN AND LIFE ANNUITY? The QDRO reaffirms the division between the parties and entitles the ex-spouse to a portion of the participant's total retirement benefit (under the agreed-upon formula) retroactive to his annuity starting date. AT SOME POINT THE PARTICIPANT MUST HAVE APPLIED FOR HIS RETIREMENT BENEFITS. WHAT DOES THAT DOCUMENT HAVE TO SAY ABOUT THE OPTIONS THAT WERE AVAILABLE AND SELECTED? IN THE 40 YEARS THAT I HAVE BEEN PREPARING QDROS I HAVE NEVER SEEN A PLAN MAKE RETROACTIVE PAYMENTS TO THE ALTERNATE PAYEE WHEN THE PAYMENTS WERE ALREADY PAID OUT TO THE PARTICIPANT. Based on DOL Regulations at 29 C.F.R. Section 2530.206, the timing of the entry of the QDRO does not adversely impact its qualification. YOU ARE MISREADING 29 C.F.R. Section 2530.206 THAT ADDRESSES AND RESTATES THE PENSION PROTECTION ACT OF 2006. HERE ARE SOME CASES TO REVIEW: Thomas v. Sutherland at https://scholar.google.com/scholar_case?case=1601430218420084129&q=Thomas+v.+Sutherland+&hl=en&as_sdt=20006 where the U.S. District Court in Utah held: "Although there is no case law precisely on point, the supporting material suggests that this is the appropriate result. The Code of Federal Regulations provides that a DRO does not fail to be treated as a QDRO solely because of the time at which it is issued. 29 C.F.R. 2530.206(c)(1). This includes orders issued after the participant's death, and occasions where a divorced spouse no longer meets the technical definition of a "surviving spouse" under the terms of the plan. 29 C.F.R. 2530.206(c)(1)(ex. 1 & 2). In addition, the Eighth Circuit has found that a domestic relations order can be qualified posthumously if notice is given and the order is filed during the eighteen-month period permitted under ERISA to secure a QDRO. Hogan v. Raytheon, 302 F.3d 854, 857 (8th Cir. 2002). Although different than the case at hand, the trend has been to enforce the terms of an otherwise valid QDRO as it was intended to be enforced, so long as notice was given and the order was filed during the period permitted under ERISA." (Emphasis supplied.) See also, 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. Said the Court: “Domestic relations orders entered after the death of the plan participant can be QDROs. In the Pension Protection Act of 2006, Congress made clear that a QDRO will not fail solely because of the time at which it is issued, see Pub. L. No. 109-280, § 1001, 120 Stat. 780 (2006), although several of our sister circuits had already reached that conclusion, see, e.g., Files v. Exxon Mobil Pension Plan, 428 F.3d 478, 490-91 (3d Cir. 2005) (finding that a posthumous order constituted a QDRO), cert. denied, 547 U.S. 1160 (2006); Patton v. Denver Post Corp., 326 F.3d 1148, 1153-54 (10th Cir. 2003) (same); Hogan v. Raytheon Co., 302 F.3d 854, 857 (8th Cir. 2002) (same); Trs. of Dirs. Guild of Am.-Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 421-23 (9th Cir. 2000) (same).” Miletello v. R M R Mechanical Inc., 921 F.3d 493 (USCA 5th Cir. 2019) cited Yale-New Haven Hospital v. Nicholls, supra. I AM NOT AWARE OF ANY CASE WHERE THE PPA WAS CITED AS AUTHORITY FOR THE PROPOSITION THAT A PLAN THAT A PLAN MUST PAY ARREARS TO AN ALTERNATE PAYEE THAT HAVE ALREADY BEEN PAID TO THE PARTICIPANT. THE SURVIVOR ANNUITY IS ANOTHER MATTER SINCE THE ALTERNATE PAYEE MUST BE ALIVE IN ORDER TO RECEIVE THAT FUTURE BENEFIT. In addition, the QDRO provides for payment to the ex-spouse for the participant's lifetime (since the 10-year guarantee period has expired), which is a fomr of payment provided under the Plan document. Moreover, case law which is contolling in the circuit in which the Plan is administered and in which the participant and former spouse reside do not compel a different result. This is my question: given the eleven-year period that has elapsed since the annuity starting date, is the payment due to the spouse for the period beginning on the annuity starting date and ending on the date on which the first prospective payment begins under the QDRO, permitted to be increased by interest or some other manner of compensatiing the former spouse for the delay in commencing the benefit payments to her? If the benefit had been provided under an annuity contract, I would be inclined to say no. However, since the benefit is provided from the assets of the plan's trust, I am inclined to conclude that some measure of earnings is due to the former spouse. Also, as a corollary to my question, if you agree that the spouse should be entitled to interest or earnings for the period of the delay in commencing payments to her, how should the plan arrive at an appropriate level of interest or measure of earnings? WITH THE BENEFIT OF AI: 29 CFR § 2530.206 is a Department of Labor regulation that clarifies the timing and order of issuance of Domestic Relations Orders (DROs) under ERISA. It specifically implements section 1001 of the Pension Protection Act of 2006 (PPA) to ensure that a DRO does not fail to be a Qualified Domestic Relations Order (QDRO) simply because of when it was issued. When applied to "retroactive" payments or look-back periods, the interaction between 29 CFR § 2530.206 and ERISA's broader QDRO rules (specifically ERISA § 206(d)(3)) dictates how a plan administrator handles benefits that accumulated or were paid out before the QDRO was finalized. Here is a breakdown of how the regulation impacts retroactive rights and payments. 1. Timing Does Not Disqualify Retroactive Orders The core purpose of § 2530.206 is to protect an alternate payee’s right to secure a QDRO even after major lifecycle or plan milestones have passed. Under § 2530.206(c), an order will not fail to be a QDRO solely because it is issued: After the participant's Annuity Starting Date (when retirement payments have already commenced). After the participant’s death. After a divorce has already been finalized (revising or establishing rights post-decree). Because the regulation explicitly validates post-event orders, courts can draft domestic relations orders that look backward to assign benefits that accrued or should have been paid from an earlier date (e.g., the date of separation or divorce), even if the participant is already retired or deceased. 2. The 18-Month Segregation Period & Retroactivity When a plan administrator receives a DRO, ERISA section 206(d)(3)(H) establishes a strict framework for preserving retroactive amounts while the plan evaluates whether the order qualifies as a QDRO: Segregation of Funds: The plan administrator must separately account for or segregate the amounts that would have been payable to the alternate payee during the determination period if the order had been treated as a QDRO from day one. The 18-Month Window: The plan has up to 18 months (beginning on the date the first payment would be bumpy under the order) to resolve the order's status. Retroactive Payout: If the order is determined to be a QDRO within that 18-month window, the plan administrator must pay the segregated amounts (plus interest) retroactively to the alternate payee. Expiration of the Window: If the 18 months expire without a QDRO determination, the administrator must release the segregated funds to the person who would have received them otherwise (usually the participant). If the order is qualified after the 18 months, the QDRO only applies prospectively, meaning the alternate payee loses the right to recover those specific segregated historical payments directly from the plan. 3. Crucial Limitations on "Retroactive" Plan Demands While § 2530.206 permits an order to be issued late, it does not override ERISA’s fundamental prohibitions on altering a plan's structural or actuarial obligations. An order seeking retroactive payments will fail to be a QDRO if it violates the following: No Increased Actuarial Value A retroactive order cannot force a plan to pay out more total money than it would have under the participant's original benefit structure. If a participant has been drawing a single-life annuity for five years, a retroactive QDRO cannot force the plan to recalculate past distributions in a way that increases the plan's total financial liability. No Re-Annuitization of Past Payments If an order is issued after the annuity starting date, it generally can only allocate a portion of the ongoing monthly annuity payments currently being made to the participant. An order can state that an alternate payee is entitled to a percentage of the participant's future monthly checks. However, if the order attempts to completely recalculate past payments or change the fundamental form of the benefit (e.g., converting a participant's active single-life annuity into a joint and survivor annuity based on the alternate payee's life expectancy), it will be rejected under ERISA § 206(d)(3)(D) because it requires a "type or form of benefit" not otherwise provided. Summary for Drafting and Enforcement If a domestic relations order seeks to capture "retroactive" amounts (e.g., past pension payments that the participant pocketed entirely during a lengthy divorce dispute), the plan itself may not be legally allowed to claw back those funds from the participant to pay the alternate payee. Instead, the remedy for true retroactive payments typically follows one of two paths: Prospective Offsets: The QDRO is structured to give the alternate payee an increased share of the participant's future monthly payments until the past arrearage is mathematically satisfied. Direct Judgment: The domestic relations court enters a separate money judgment directly against the participant for the past-due amounts, rather than trying to force the pension plan to pay retroactively outside of the 18-month segregation rule. Thanks in advance!

If you want to assess blame, it's likely on the attorney for the Alternate Payee. He/she is guilty of malpractice and also a violation of the Rules of Professional Conduct relating to competence. But the point is that the money is no longer in the 401(k) and a would assume that 60 days have elapsed from the date of distribution and you cannot restore it to the 401(k) or to an IRA or other eligible retirement account. In most states the source of the obligation to transfer pension and retirement benefits is in the Marital Settlement Agreement ("MSA") signed by the parties and incorporated but not merged in the Judgment of Divorce, or, if there is no MSA, then the Judgment of Divorce itself. The QDRO is just an enforcement tool like an attachment or garnishment. So what you owe her is the amount that was to be paid as of the "Valuation Date" adjusted for gains, losses and investment experience from the Valuation Date to the Date of Distribution to the Alternate Payee, less the state and Federal income taxes that she will have to pay at her marginal tax rate. Not your marginal rate. I am not sure what you meant when you said you "liquidated" your 401(k). If you actually meant that you rolled it over to an IRA or other eligible retirement account, then you can obtain a new RBO or QDRO and pay your Former Spouse from the IRA or other eligible retirement account and it will be free of tax consequences unless she decides to take a distribution and if that happens the tax consequences are on her. David

From my perspective as a QDRO preparer there is the problem. It is not unusual for Participants in defined contribution plans to do everything imaginable to reduce their account balance and thereby reduce the amount that will ultimately become payable to their soon-to-be former spouse Alternate Payees. They will, for example: (i) retire and roll over the entire amount in their account to an obscure bank (or banks) in the middle of Nowhere, Wyoming, and move it from bank to bank to avoid collection efforts, or perhaps they will distribute the entire balance, pay the least amount of taxes withholding they can get away with, and hide the money in the Royal Bank of Tierra del Fuego or in their broker-in-law's corporate savings account in a bank in Vancouver; or (ii) they will take a maximum loan (not to exceed $50k); or, (iii) they will make a hardship withdrawal. From the perspective of the Alternate Payee it is not helpful to make it easy for the Participant to make a hardship withdrawal by "self-certifying". You probably will not believe this, but PEOPLE LIE! Even fraudulently and under oath and under the penalty of perjury and despite warnings that lying is a felony. People who fill out online applications for retirement from the Federal Government will click the box that says "unmarried". Members of the Military will find a friendly doctor who will give them a 100% disability rating and deprive the Former Spouse from receiving disability income that not be classified as marital property divisible in divorce. [The foregoing is a little more complicated but I didn't want to get down in the weeds and throw out a lot of acronym like CRSC or CRDP.] I am pretty sure that you cannot you cannot permit self-certification unless it's in the Plan Documents. But if self-certification is not permitted, then the Plan Administrator has to decide whether the alleged "hardship" is legit and expose themselves to being sued by the prospective Alternate Payee to whom the Plan Administrator owes a fiduciary duty if they make the wrong call. So if you are going to permit self-certification, and if you put that in the Plan Documents, how about required notice to (and consent by?) the spouse who then will have the burden of filing a Notice of Adverse Claim/Interest, and asking the Court where the divorce is pending to enjoin the hardship withdrawal, and giving actual notice to the Plan Administrator that will likely be told my their attorney to do nothing until the parties agrees or the court rules. David

If she took a distribution the Plan filed or will file a 1099-R and will likely have held back 20% for Federal taxes and perhaps something for State taxes as well. She would have had 60 days from the distribution to redeposit the distribution into an IRA or other eligible retirement account and avoid the payments of taxes (and perhaps the 10% early withdrawal penalty), but she will have to use the 80% she has in hand and add the other 20% from her own pocket. That 20% is in the hands of the IRS and they are not going to give it back. I don't know if the 401(k) from which she took the distribution is an "eligible" retirement account, but I don't see why not. So time is your problem. David

I assume that the employee is paid for the hours he works rather than for what he accomplishes. But, wait. What is "working"?. Enjoy this tune.

QDROphile: Did the Plan have notice that there had been a divorce? Or that there was an Agreement? Or that a QDRO was in the works? If the Plan had notice and was under ERISA or another plan where the underlying law requires a QJSA and a QPSA why did they not pursue that. Did the prospective Alternate Payee file a Notice of Adverse Claim/Interest in the pending court proceeding and serve a copy to the Plan Administrator? The narrative says "employee retired and began receiving the agreed upon portion of pension benefits in the form of a straight life annuity." That makes no sense. The employee would have received the full and unreduced amount of his pension benefits. Or does rocknroll2 familiar with actuarial equivalence I assumed that the a "straight line annuity" means a "single life annuity" but I am not sure that is the case. Or maybe he mean a straight life annuity". Or does he not understand or conflating the concept of actuarial equivalence pursuant to 29 USC Sections (d)(1)(B), (d)(2)(a)(ii), (e)(1)(A) and (e(2). The question asked was, "can payments to the ex-spouse be made retroactively to the annuity starting date" but it doesn't ask FROM WHO? The employee or the Plan? So here are again, wasting our time, trying to figure out the answer to a question that does not contain the required information. It would help if rocknrolls2 would set for the name of the Plan. If it's ERISA qualified he can find it at https://www.efast.dol.gov/5500Search/ David

It depends in part on the source of the obligation to make payments to the Alternate Payee. In some few states that source is the QDRO itself. But in most states the obligation to pay the Alternate payee is found in an Agreement of the parties that has been incorporated but not merged in the Judgment of Divorce, or, if there is no Agreement, in the Judgment of Divorce itself. If the Plan Administrator starts to make payments to the Participant before a QDRO is perfected, the Plan is not going to make retroactive duplicate payments to satisfy the arrears not paid to the Alternate Payee. But if the obligation is based on the Agreement or the Judgment of Divorce, the obligation is still there and the Alternate Payee [and if the collection of the Alternate Payee's share is not barred by a statute of limitation or the doctrine of laches] can sue to collect those arrears from the Participant, but not from the Plan itself. [In FERS and CSRS there is an option of increasing the amount paid to cover arrears. See 5 CFR 838.234 - Collection of arrearages.] But it seems that in your case the Participant retired and began to receive a 'straight line" (that I assume means "single life" annuity) based on the actuarially computed life expectancy of the Participant and with no survivor benefit provisions. You haven't identified the name of the Plan but I would guess that it is a state, county or municipal plan that does not mandate a survivor annuity benefit for a former spouse. And I have the feeling that the Court Order is not actually a "QDRO" since it is not pursuant to ERISA. You said that the parties "agreed". Was there a written agreement? Was it incorporated but not merged in the Decree of Divorce? Did the Agreement and/or the Decree of Divorce t provide for a survivor annuity? Is the Participant still alive? You cite 29 CFR Section 2530.206 where reannulization is addressed in paragraph (c)(2) -Example 3, and (d)(2) - Example 4. I don't understand how you case would permit a change from a single life annuity for the life of the Participant to a single life annuity for the life of the Alternate Payee or to a form of Qualified Joint and Survivor Annuity? Artie M raises the possibility that the QDRO was perhaps drafted as a separate interest allocation and not a shared interest allocation. But in every case I have seen in the past 40 years you cannot elect a separate interest allocation after the Participant retires. And in all events there are no survivor benefits in a separate interest allocation. DSG

Check out https://www.tiaa.org/public/pdf/q/QDRO_approval_guidelines.pdf https://www.tiaa.org/public/support/faqs/retirement-divorce https://www.tiaa.org/content/dam/tiaa/global/doc/word/DA_QDRO.doc https://www.tiaa.org/content/dam/tiaa/global/doc/word/IA_QDRO.doc https://www.tiaa.org/content/dam/tiaa/global/doc/word/IRA_QDRO.doc TIAA will no longer will compute gains and losses for DA accounts. See the Guidelines paragraph 5.a.iv. See my attached Memo In this regard they are following the lead of IRA custodians. David TIAA CREF Issue - Gains and Losses.pdf

Does this help? https://www.federalregister.gov/documents/2026/02/27/2026-03962/employee-or-independent-contractor-status-under-the-fair-labor-standards-act-family-and-medical?utm_campaign=subscription+mailing+list&utm_medium=email&utm_source=federalregister.gov

You did not provide enough information to answer your questions. For example: 1. The exact name of the 175,000 pension and retirement plans that operate within the USA (not including IRAs). These include about 163,000 ERISA qualified plans, plus about 12,000 Federal, State, County, City, and Municipal Plans, International Plan, and Union and Church sponsored plan that dance to their own tune. 2. Whether you had a marital settlement agreement and the exact language set forth in that document? 3. Whether the marital settlement agreed was incorporated but not merged into the Divorce Decree? 4. If there was no marital settlement agreement, what was the exact language in the Divorce Decree? 5. Whether a QDRO or a DRO or a EDRO, or a RBO or other forms of Order was entered by the Court? 6. Was a certified copy sent to the Plan Administrator or Third Party Administrator or Record Keeper? 7. Whether during the past 5 years the Third Party Administrator or Record Keeper changed? New TPAs don't have the records necessary to compute gains and losses. 8. Note that most IRAs do not compote gains and losses. 9. Note the TIAA-CREF do not compute gains and losses on annuity payouts as of January 1, 2023. 10. Did the Plan Administrator or the Third Party Administrator or the Record Keeper approve or "qualify" the QDRO or other form of court order? And sent a letter with instructions and did you follow those instructions. 11 Does the state law permit the allocation of pension and survivor benefits between divorcing parties? 12. If you are dealing with a defined contribution plan like a 401(k) or a 403(b) are there any limitations on when an Alternate Payee can receive his/her share of the Participant's benefits. Some plans do not permit a payout to the Alternate Payee until the Participant is eligible to receive his/her benefits, and that might be at termination of employment (death, quit, retired, terminated. Such plan may have payout options that don't begin to be paid until some future time. 13. Does your state have any laws (statute of limitations, doctrine of laches) that would limit the time within which you must submit the QDRO to the Plan Administrator. 14. If it possible that you or your lawyer simply failed to send a CERTIFIED copy of the QDRO to the Plan Administrator? Or that it didn't have a date filled in? Or that you moved to a new home and didn't advise the Plan Administrator of your new address? 15. It sounds like in your case the intention was to award you a percentage or a hard dollar amount from the Participant's plan as of a division date (the date that it was valued) and that that amount was to be adjusted for gains and losses from that division date to the date that the Plan Administrator segregated your share to a separate account in the plan in your name and for your use and benefit. From the date you share landed in YOUR account it is YOUR MONEY and would normally the adjusted for gains and losses from that date until the Date of Distribution when you can: (i) roll over all or part of your share tax free to an IRA or to another eligible account; or, (ii) take a taxable distribution (paid directly to you) of all or part of your share. 16. Or perhaps your former spouse quit or retired or was fired and just took out all of his/her money and paid the taxes on it and has it hidden under the mattress or in a bank in Tierra del Fuego. Nevertheless here is a Memo with respect to Gains and Losses that may be helpful to you. Did you have a lawyer representing you in your divorce? DSG GAINS AND LOSSES AND INVESTMENT EXPERIENCE 02-04-2025.pdf

Waiver of what? Retirement annuity benefits and/or survivor annuity benefits. In my family law world you might be talking about waiving QJSA and QPSA benefits? Is it an ERISA qualified plan? Or a Federal, State, County, City, or Municipal plan or an International Plan. Is it a defined contribution plan that acting in accordance with Secure 2.0 has added any form of annuitized payout of benefits? Is it an IRA? Is it a waiver set forth in an antenuptial agreement? In what sort of document will be waiver appear? Did the Participant retire during the marriage or after the divorce? In many plans an award or a waiver of survivor annuity benefits executed at retirement during the marriage do not survive a later divorce and must be reinstated by a COAP or MRPDO, for example, FERS and Military. On the other hand, such elections with respect to ERISA qualified plans do survive survive a later divorce. David

This has become a serious problems for those of us you prepare QDROs. We used to rely on the in-house Plan Administrator to adjust for gains, losses and investment experience from the Valuation Date to the Date of Distribution, vel non. But they started to outsource this task to Third Party Administers like Fidelity, MassMutual, Yoya, Vanguard, and invariably they would not have any records prior to the date that they took over as the TSA. Now we have "Record Keepers" and the same problem. It is actually worse than that. IRA custodians will not adjust from date to date. The value to be transferred is determined on the date they make the transfer from one party to the other. Take a look at the attached Fidelity form Effective January 1, 2023, TIAA-CREF is doing the same thing for deferred annuities. Solution - take the AP's share from CREF accounts, not TIAA accounts. There are workarounds in my home state of Maryland, none official. See the attached "Valuing" Memo for a few ideas. Averaging growth in the DOW, S&P 500, Nasdaq and Moody's from date to date is popular. Most useful was my own stockbroker, John Young at UBS, who relied upon the Reynolds case https://scholar.google.com/scholar_case?case=7890958532011854972&q=reynolds+v.+reynolds+marital+property&hl=en&as_sdt=4,21 using a treasury rate/note/bill as a minimum rate of return. See the attached analysis he did for me. It wasn't a big case, but it showed it could be done. The other side didn't buy it and the client decided the benefit was not worth the cost of fighting it Let up know what happens. David Fidelity IRA Form.pdf Valuing Defined Contribution Plans.pdf Sample Case Growth Computation..pdf

There are 163,000+ ERISA qualified retirement and pension plans in the USA are you going to assume that it is your Plan. I would kick it back and require the Order to identify the correct name of the plan. You didn't say that this was a QDRO and that it was a garnishment intended to implement a criminal restitution. In order for that to take place the court would first have to determine that the debtor's spouse did not have a marital interest in the Plan. In US v. Abell, 435 F.Supp.3d 299 (D. Mass.,2020), affirmed 985 F.3d 111 (2021), the husband pleaded guilty to eight counts of wire fraud and money laundering and was sentenced to 97 months incarceration and three years supervised release. The Court also issued an Order of Forfeiture for criminal restitution in the amount of $3,879,750.00. The Government sought a Writ of Garnishment against the husband's assets including his 401(k) plan with an approximate value of $393,500.00. The husband and his wife oppose garnishment of the 401(k) account on the grounds that the wife had a vested interest in the 401(k) account by virtue of her marriage to the husband, and that Massachusetts property law compels equitable distribution of marital assets and, therefore, the wife is entitled to an equitable portion of the funds in the 401(k) account. The court held: "The argument that Massachusetts property law precludes garnishment of defendant's 401(k) Account is unavailing. Persuasive case law indicates that the pre-divorce property interest of an individual in her spouse's ERISA-qualified retirement account is governed exclusively by federal law, not state property law. See, e.g., United States v. Novak, 476 F.3d 1041, 1061 (9th Cir. 2007) (en banc) ("Retirement plans covered by ERISA ... are governed exclusively by federal law."); United States v. Beulke, 892 F. Supp. 2d 1176, 1180 (D.S.D. 2012) ("Federal law, not state community property law, determines whether a person has a 'property or a right to property' interest in an ERISA-qualified pension plan."). It is undisputed that the Abells are still married. In the absence of a divorce decree or other qualifying domestic relations order, state property law will not displace federal law with respect to a spouse's alleged claim to a 401(k) Account subject to a criminal restitution order. See Beulke, 892 F. Supp. 2d at 1180." (Emphasis supplied.) In US v. Brazile, Case No. 4:18-cv-00056 SEP., United States District Court, E.D. Missouri, Eastern Division.(2020), - -https://scholar.google.com/scholar_case?case=17860472826493880578&hl=en&lr=lang_en&as_sdt=6,33&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:12484640753426065479:AAGBfm1agvHLwT5aWZ_N6PDZrK7iWFqV8A&html=&eexpid=320022102 ...involved a case where on July 30, 2013, Steven Brazile ("Steven") pleaded guilty to one count of transportation of securities obtained by fraud, in violation of 18 U.S.C. § 2314. As a part of his plea agreement with the Government, Steven acknowledged that he owed restitution in the amount of $3,902,880.85. The Government has a lien against Steven's property and rights to property under 18 U.S.C. § 3613(c) as a result of the judgment entered against him on November 13, 2013, in the Northern District of Illinois. Before the entry of Steven's sentence and judgment, Lorraine Brazile ("Lorraine"), Steven's then-wife, filed a suit for dissolution of marriage in the Circuit Court of St. Louis County, Missouri, on July 25, 2013. Id. On August 29, 2013, Defendants entered into a voluntary Property Settlement and Separation Agreement ("Agreement"), and the circuit court entered a final judgment of dissolution awarding Lorraine child support and a portion of Steven's pension benefits. On August 24, 2016, Defendants submitted a qualified domestic relations order ("QDRO") to the divorce court, which assigned Lorraine 100% of Steven's lump sum benefit amount and monthly annuity benefits. The QDRO similarly awarded Lorraine 100% of the Braziles' marital home on Vienna Avenue (the "Vienna property"). In September of 2017—four years after their marital dissolution and 13 months after they submitted their QDRO assigning the disputed assets to Lorraine—probation officers conducted a home visit and discovered that Steven and Lorraine were living together with their children and were raising their kids together as a "family." Id. ¶ 28. The Government contends that this demonstrates the Defendants entered into a "sham divorce" to transfer assets to Lorraine that could otherwise have been used to pay victim restitution. The Government alleges fraudulent transfer in violation of 28 U.S.C. § 3304(a)(2) (Count I); fraudulent transfer in violation of 28 U.S.C. § 3304(b)(1)(A) (Count II); and fraudulent transfer in violation of 28 U.S.C. § 3304(b)(1)(B) (Count III). The Government alleges that Steven has violated three provisions of the Federal Debt Collection Procedures Act ("FDCPA"). As a remedy, it asks the Court to void the final judgment and dissolution of property in Defendants' divorce case, enter judgment for the United States for the full value of the property transferred from Steven to Lorraine, and grant the United States a lien against all fraudulently transferred property such that it can seize that property immediately to pay Steven's restitution. By seeking dissolution of agreements to which he is a party, reversal of his transfer of assets to Lorraine, and seizure of the house he lives in as well as other assets that allegedly support him and his family—all in satisfaction of Steven's own debt. The court goes on to consider several evidentiary issues, expert witness qualifications, res judicata, collateral estoppel, waiver, equitable estoppel, and more. The Court then held: "Count III alleges constructive fraud in violation of 28 U.S.C. § 3304(b)(1)(B). Doc. [1] at 11. To prove constructive fraud under that section, the Government must show that Steven transferred assets to Lorraine "without receiving a reasonably equivalent value in exchange for the transfer" at a time when he "intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due." 28 U.S.C. § 3304(b)(1)(B)(ii). "As noted already, the Government alleges the Braziles' divorce settlement gave Lorraine all of the couple's viable assets in order to insulate those assets from Steven's criminal restitution liabilities. The Government thus contends that all the elements of § 3304(b)(1)(B) have been met. Doc. [66] at 5-12." * * * * "By contrast, the Government has produced substantial, undisputed evidence that Steven was aware of his impending restitution liabilities when he signed the divorce settlement. See, e.g., Doc. [85] ¶¶ 15, 17-18, 32. The restitution debt totaled roughly four times what Steven received in the divorce, even if the assets allocated to him are assigned their full value. See Doc. [87] at 31 (explaining that the "grand total" of Steven's share of the divorce settlement amounted to $800,490.0).[7] Steven has neither contradicted this evidence nor produced other evidence that would support a finding in his favor, so the Government is entitled to summary judgment." See also Cf: United States of American v. Wolas, 520 F.Supp.3d 114 (2021) - Criminal Action No. 17-10198-FDS,United States District Court, D. Massachusetts (2021), - https://scholar.google.com/scholar_case?case=9503464558169105254&q=United+States+of+American+v.+Wolas,+Criminal+Action+No.+17-10198-FDS,United+States+District+Court,+D.+Massachusetts+(2021)&hl=en&as_sdt=20000003= another forfeiture case where the parties had been divorced and sought to amend the divorce decree to give the ex-wife the ex-husband's $700,000.00 retirement account. Said the Court: "In Florida, marital assets are distributed equitably upon divorce. Fla. Stat. Ann. § 61.075. Such assets include "[a]ll vested and nonvested benefits, rights, and funds accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs." Fla. Stat. Ann. 61.075(6)(a) (emphasis added). A spouse who does not have legal title to a marital asset acquires an interest in that asset only if a court issues a judgment during the divorce proceeding establishing that interest. United States v. Kermali, 60 F. Supp. 3d 1280, 1283 (M.D. Fla. 2014) ("In Florida, however, there is no legal interest in marital assets until a judgment vesting such interest has been entered in a divorce proceeding."); Fla. Stat. § 61.075(8) ("[T]itle to disputed [marital] assets shall vest only by the judgment of a court."). (Emphasis supplied.) In re Michael GONSALVES, Debtor, Monica Gonsalves, Plaintiff v. Michael Gonsalves, Defendant, Bankruptcy No. 12–30233, Adversary No. 13–00023, Signed Oct. 1, 2014, 519 B.R. 466, United States Bankruptcy Court, D. Maryland, at Greenbelt, the Court said: "The Master's Report did not include a statement of the standards employed to determine extant property. But the standards are well established. In determining a marital award in Maryland, a court must determine the amount and value of marital property at trial. Property that is disposed of before trial cannot be declared marital property, with the exception of dissipated property. Omayaka v. Omayaka, 417 Md. 643, 12 A.3d 96, 101 (2011). Generally, "marital property which generates a monetary award must ordinarily exist as "marital property" as of the date of the final decree of divorce based on evidence adduced at the trial on the merits or a continuation thereof. Therefore, property disposed of before commencement of the trial under most circumstances cannot be marital property. Although, "marital property" is defined as "all property, however titled, acquired by either or both spouses during their marriage ...," the legislative scheme of the 1978 Marital Property Act contemplates determination of marital property at the time marriage is dissolved, i.e., when the absolute divorce is granted. On a related matter, see USA v. Wells, No. 23-3969,D.C. No. 3:13-cr-00008-SLG-1, United States Court of Appeals for the 9th Circuit, (September 26, 2025), addressing the right to seize the full amount of a convicted felon’s TSP account under the Mandatory Victims Restitution Act of 1996 (MVRA) in derogation of the spouse’s right to insist on an annuitized payout what would make is subject to a garnishment not to exceed 25%. The purpose of the MVRA is to provide compensation for crime victims and their families. Said the court: “Under the MVRA, the government cannot enforce a restitution order by cashing out a defendant’s retirement plan account if the retirement plan’s terms prohibit the defendant from doing so without spousal consent. Here, FERSA § 8435 provides the relevant terms of Wells’ retirement plan. Section 8435 prohibits Wells from cashing out the balance of his TSP account without his spouse’s consent. Section 8437(e)(3) does not expand the government’s authority under the MVRA, nor does it override FERSA’s spousal protections.” See United States v. Byers, 133 F.4th 824 (USCA 8th Cir. 2025). The IRS brought suit against the husband to enforce a substantial tax lien against the family home that was titled in his sole name. He and his wife claimed that the wife had a property interest in the property as the “marital homestead”, pursuant to Minn. Stat. § 507.02, and, therefore, was entitled to half of the proceeds from the sale of the property. Said the Court: “Although "Minnesota homestead laws," including § 507.02, afford Deanna "extensive protection to safeguard her rights and interests in the homestead property owned by [Ronald]," they "do not vest in [Deanna] a property interest which rises to the level of that recognized under Texas law in United States v. Rodgers, 461 U.S. 677[, 103 S.Ct. 2132]." Id. As a result, Deanna's "homestead interest in the [Wayzata Property] is not in the nature of a property right for which the government need compensate in a forced sale action under 26 U.S.C. § 7403." Id.[4] The district court did not err in determining that Deanna lacked a present property interest in the home and granting summary judgment to the government.” Although Minnesota has the concept of “marital property” in its law, Minnesota Statutes 518.003, neither party argued that the wife had a marital property interest in the proceeds of sale. SOOO... since you have a fiduciary duty to the Participant and a potential Alternate Payee you might want to confirm that there is in fact no such potential Alternate Payee who will suffer a loss of benefits if a divorce action is pending and/or the account with which you are dealing is "marital" or "community" property, and or is not subject to being garnished or attached. And while you are at it, take a look at one of my favorite cases: Brown v. Continental Airlines, Inc., 647 F. 3d 221 (5th Cir., 2011)- https://scholar.google.com/scholar_case?case=4019345202025914766&q=brown+v.+continental+airlines&hl=en&as_sdt=20000003 Continental alleged that a number of pilots and their spouses obtained "sham" divorces for the purpose of obtaining lump sum pension distributions from the Continental Pilots Retirement Plan that they otherwise could not have received without the pilots' separating from their employment with Continental. The pilots were allegedly acting out of concern about the financial stability of Continental and the fear that the Plan might be turned over to the PBGC and that their retirement benefits would be substantially reduced. By divorcing, the pilots were able to obtain QDROs from state courts that assigned 100% (or, in one instance, 90%) of the pilots' pension benefits to their respective former spouses. The Plan provides that, upon divorce, if the pilot is at least 50 years old (as all the pilots in this case were), a former spouse to whom pension benefits are assigned can elect to receive those benefits in a lump sum even though the pilot continues to work at Continental. The former spouses presented the QDROs to Continental and requested payment of lump-sum pension benefits. After the former spouses received the benefits, the couples remarried. Continental sought to obtain restitution under ERISA Section 502(a)(3). The Court of Appeals noted that ERISA § 206(d)(3) limits the QDRO qualification determination to whether the state court decree calls for benefit payments outside the terms of the Plan. It rejected Continental’s expanded reading of § 206, concluding that plan administrators may not question the good faith intent of Participants submitting QDROs for qualification David

I assume that an "order of precedence" (that might be found in the plan documents or in the governing statute or regulations) doesn't stop with spouse and children but keeps going to parents, brothers and sisters, nieces and nephews, next of kin who is entitled to the estate under the laws of the state, and Kevin Bacon.