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I think you might be well served by waiting until you find out if a QDRO was received by the Plan and accepted. That will resolve the issue. Here is the New York law -https://jdbar.com/statutes/eptl-5-1-4/ It looks like a divorce will revoke a beneficiary designation in a pension or retirement plan, but only if the decedent had the power to revoke the beneficiary designation. A QDRO or an Agreement might have made it irrevocable. Here are 28 New York cases that address that section of the code in connection with pension and retirement plans. https://scholar.google.com/scholar?hl=en&as_sdt=4%2C33&q=EPTL+5-1.4+retirement+pension&btnG= Why does everyone assume that the participant's failure to name a new beneficiary was a mistake. Maybe there was an Agreement that she would do so. Maybe the participant made a conscious decision to maintain her ex-husband as beneficiary - perhaps to care for a disabled family member. Her intend may not matter to the outcome, but you know what they say happens when you assume. DSG

Will HHS make determinations as to whether a provision of state law is “more stringent” than or “contrary” to a provision of the HIPAA Privacy Rule? Answer: The Department of Health and Human Services (HHS) will not make determinations as to whether a provision of State law is "more stringent" than a provision of the Privacy Rule. HIPAA's Administrative Simplification Rules provide a general exception to preemption for more stringent, contrary State laws. Because such an exception already exists, it is neither necessary nor appropriate to request a preemption exception determination from HHS. Further, HHS will not determine whether a provision is "contrary" to the Privacy Rule, except in the context of, and as necessary to, making an exception determination for State laws that meet one or more of the criteria listed at 45 CFR 160.203(a). See 45 C.F.R. 160.202 for the definitions of "more stringent" and "contrary." View an unofficial version of the Privacy Rule and the preemption requirements. https://www.hhs.gov/hipaa/for-professionals/faq/408/will-hhs-make-determinations-whether-a-provision-of-state-law-is-more-stringent/index.html I would think this is evidence that HHS does not maintain such a list, and that such determinations are made on a case by case basis, if at all. >>>>>>>>>>>>>>>>>>>>>>>>>> The attached survey of state laws may be helpful. >>>>>>>>>>>>>>>>>>>>>>>>>> See also https://abyde.com/state-laws-vs-hipaa-what-you-need-to-know/ >>>>>>>>>>>>>>>>>>>>>>>>>> See also https://www.findlaw.com/state/health-care-laws/medical-records.html >>>>>>>>>>>>>>>>>>>>>>>>>> David Goldberg 50-State-Survey-of-Health-Care-Information-Privacy-Laws.pdf

With respect to what issue?

Excerpted from the PlanSponsor newsletter article by Paul Mulholland, with [bracketed comments by DSG]. Although the SECURE 2.0 of 2022, primarily focused on defined contribution plans, it also contains reforms to defined benefit [pension] plans. Section 342 of SECURE 2.0 - [effective January 1, 2023] - the biggest change to DB plans found in the legislation, changes disclosure rules for DB plans that offer lump sum payments. DB plans often offer participants an opportunity to receive a lump sum instead of an annuity, which sponsors sometimes encourage, since when they remove the participant from the plan, they pay less insurance to the Pension Benefit Guaranty Corporation. [We normally identify these plans as a "cash balance" plan, a hybrid plan that allows for an annuitized payout that you would expect from a defined benefit plan, and an option to make a lump sum withdrawal that you would expect to see in a defined contribution plan. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/cash-balance-pension-plans] [Is it better to take a lump sum or an annuity? See - https://www.aarp.org/retirement/planning-for-retirement/info-2020/monthly-pension-vs-lump-sum-payout/?cmp=RDRCT-2775b32f-20200915] Congress was concerned that many participants were making bad financial choices related to these lump sums, so they required new disclosures for DB plans that offer them. “For years, the federal government has allowed businesses to get out of their pension obligations by offering cash settlements to their employees, frequently in amounts that are much less than insurance companies would charge to assume those obligations. Most people took the check, which was often for tens of thousands of dollars, without knowing that their pension rights were worth far more, and the government didn’t require that they be told. Now, finally, Congress is acting to help those who still have their pensions.” [In other words, the present value of a lump sum payment was far less than the present value of the stream of annuitized benefits that the Participant would have received over his/her lifetime (assuming that the COLA rate selected is correct, and assuming that the PBGC discount rate selected is correct, and assuming that the Participant retires at the age selected, and assuming that the Participant's life expectancy is correctly predicted by the mortality tables used, and assuming that the Alternate Payee lives long enough to receive his/her share of the Participant's benefits.] The new rules under Section 342 require the plan to communicate the following to participants at least 90 days before the lump sum becomes available: the value of the lump sum relative to annuities available under the plan; the interest rate and mortality figures used to calculate the lump sum; that buying their own annuity with the lump sum could be more expensive than taking an annuity under the plan; and the tax rules involved in taking a lump sum. Many plan participants have already taken lump sums without knowing it may not have been in their best interest. Gotbaum says, “After more than a million horses have left the barn, the federal government says you should put up a sign saying that, ‘By the way horses, you have other options,’ i.e. you’re being screwed.” [You will notice that nothing in the Secure 2.0 Act addresses divorce or QDROs. And these are issues that we must consider. 1. Is the Plan a "cash balance" plan that offers a lump sum payment or an annuitized payout? 2. If the Plan is not a "cash balance" plan can it nevertheless offer a choice between a lump sum payment or an annuitized payout? In short, have all defined benefit plans been turned into "cash balance" plans regardless of the language of the Plan documents? 3. Can a Participant elect to take a portion of the defined benefit plan as a lump sum and the balance as an annuitized payout? Or must it be one or the other? 4. Can the Alternate Payee who has been awarded a percentage of the marital portion in accordance with the Bangs/Pleasant formula take his/her share: (i) all as a lump sum using the denominator of the coverture fraction as the date of divorce; or, (ii) all as an annuitized payout, and if so, must it be in the form of a life annuity or will other options be available; or, (iii) partly as a lump sum and partly as an annuitized payout? 5. Will the Alternate Payee be bound by the options selected by the Participant? 6. If the Alternate Payee can elect options different from those options selected by the Participant doesn't that change the allocation of benefits from a "shared interest" (per Bangs/Pleasant) to a "separate interest"? https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/qdro-drafting.pdf 7. If the Alternate Payee selects a partial lump sum, is it clear that any survivor annuity benefit will be applicable only to the annuitized payout?] [Thought experiment: See attached present value calculation. Let's say our Participant, Bill, has reached age 65, the normal retirement date in his pension plan where he can get full and unreduced benefits. His HR department advises him that his monthly pension will be $5,000/month for his lifetime, or he can take an immediate lump sum of $700,000 and either roll all or part of it over tax free to an IRA or all or part of it take a taxable distribution. Bill consults his local actuary, Marc Pushkin, in Baltimore, and asks for advice. "What is the present value of my pension, Marc?" Marc pulls up his program, (more sophisticated than the one used by me,) and plugs in $5,000/month as the monthly pension amount, and Bill's current age, 65. He checks the PBGC website - and determines that the current discount rate is 2.8%. and assumes that it will remain the same from the date that Bill goes into pay status until his death.* https://www.pbgc.gov/prac/interest/ida - (Disregard the fact that the January, 2023, 4044 rate is actually 4.86%.) *Speculative? He checks with the plan and finds out that, on the average,* retired Participants receive a 2% COLA each year and Marc assumes that this will remain the same from the date that Bill goes into pay status until his death. Speculative? Actuaries believe that if you put your right foot in boiling water and your left foot in ice water, on average you will be comfortable. He assumes that Bill will actually retire at age 65* - although these calculations are often made years earlier - and he may retire earlier, or later, or he may die and never collect a dime of his pension. *Speculative? He checks the UP-94 mortality table and determines that Bill will live for 17.9 years after the date of his retirement at his assumed age of 65. Speculative because Bill has had 3 heart attacks and suffers from atrial fibrillation and ventricular tachycardia not well controlled by medication. Marc will admit that mortality tables are for generic people and does not take in account things like medical history or genetic factors. Based on these assumptions, Marc computes the present value of Bill's pension to be $964,865.* In other words, if you put $964,865 into a savings account earning 2.8% interest per annum until Bill's death, and if at age 65 Bill actually retires and starts to take his pension payments of $5000/month, and if he receives a COLA of 2% per annum until his death, and if he lives for another 17.9 years after age 65, his savings account will be ZERO. If the 2.8% interest discount rate changes, or if the COLA percentage changes, or if Bill expires before 17.9 years have expired, the present value of his pension could be less than $964,865 - as little as ZERO if he dies before receiving that first check. *In the past, before the enactment of Family Law Article, Section 8-204(b)(2), it was common for the court to make a monetary award to the Alternate Payee of 50% of the present value computed as above. They still have the statutory authority to do so if the Alternate Payee complies with the notice requirement of that section. And did I mention that the above calculations don't take income taxes into account and have a tendency to change from year to year. So Bill has two options: Take an annuity and hope that over the next 17.9 years all of the assumptions above will fall into place. Or take a lump sum of $700,000. What would you advise him to do? Plus valet in manibus avis unica quam dupla silvis - a bird in the hand is worth two in the forest. A contented mind is a perpetual feast. Half a loaf is better than none. Better an egg today than a hen tomorrow. "Do you feel lucky"... Dirty Harry Let's say Bob and Helen have two major assets, the house with an equity of $500,000, and Helen's pension with a present value computed as above of $625,000. Helen's attorney suggests that Helen keep her pension and Bob keep the house equity. What do you tell Bob to do? Assume a 20% tax rate on Helen's pension so that $625,000 less 20% state and Federal taxes = $500,000. Suppose the equity in the house was only $425,000? Food for thought.] I am looking for input concerning the impact, if any, that Secure 2.0 will have on the allocation of benefits under defined benefit and defined contribution plans. If, for example, the Participant retires during the marriage and elects to annuitize his defined contribution vested balance, and if a divorce occurs at some later date, is the Alternate Payee bound by the Participant's election. Can the Participant make such an election without the consent of his current spouse? Can the Participant elect a life only option and deprive the Alternate Payee of any survivor annuity benefits? Can the Participant elect survivor annuity benefits that will not be available to the Alternate Payee if she predeceases the Participant? Will a QDRO supersede/revoke/prevent/direct such an election? I have seen nothing addressing the original Secure Act or Secure 2.0 as it relates to the allocation of pension and retirement benefits and/or the ability of a QDRO control such allocation of benefits. David DSG Listserv PV Computation.pdf

In the DOL, EBSA publication, "QDROs The Division of Retirement Benefits Through Qualified Domestic Relations Orders" at question 1-13 it provides: Q 1-13:Who determines whether an order is a QDRO? Under Federal law, the administrator of the retirement plan that provides the benefits affected by an order is the individual (or entity) initially responsible for determining whether a domestic relations order is a QDRO. Plan administrators have specific responsibilities and duties with respect to determining whether a domestic relations order is a QDRO. Plan administrators, as plan fiduciaries, are required to discharge their duties prudently and solely in the interest of plan participants and beneficiaries. Among other things, plans must establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions pursuant to qualified orders. Administrators are required to follow the plan’s procedures for making QDRO determinations. Administrators also are required to furnish notice to participants and alternate payees of the receipt of a domestic relations order and to furnish a copy of the plan’s procedures for determining the qualified status of such orders. See Chapter 2 for a detailed discussion of the duties and responsibilities of plan administrators in making QDRO determinations. It is the view of the Department of Labor that a state court (or other state agency or instrumentality with the authority to issue domestic relations orders) does not have jurisdiction to determine whether an issued domestic relations order constitutes a “qualified domestic relations order.” In the view of the Department, jurisdiction to challenge a plan administrator’s decision about the qualified status of an order lies exclusively in Federal court. [ERISA §§ 206(d)(3)(G)(i) and (ii), 404(a), 502(a)(3), 502(e), 514; IRC § 414(p)(6)(A)(ii)] ...and read Section 2-14. These may not be the most authoritative source for the Plan Administrator's obligations, but for the purposes of your question it's sufficient. Peter is right. Go back to scratch and do what is required by the Plan documents. While you are at it, read Advisory Opinions 1992-17A and 1999-13A, attached, with respect to the obligation of the Plan Administrator to determine if a DRO is a QDRO. David Advisory Opinion 1992-17A - duty of Plan Admin.pdf Advisory Opinion 1999-13A _ U.S - Sham Divorces.pdf

Practice Pointer: In the future send distribution checks by direct wire transfer to the Participant's bank account. Don't mail a check that can be lost, stolen, not cashed, not deposited and not negotiated. If a check has not been cashed or negotiated the intended transaction has not been completed. It's still pending. In Maryland, Harry can sign a deed transferring real property to John, but if the deed is not actually delivered to John, then no transfer of title has been accomplished and if Harry dies John will never get title since the intended transfer was not completed. Practice Pointer: Do nothing. A Plan Administrator should not be in the position of deciding what to do in a situation like this. If he guesses wrong the Plan will be facing a claim for rather large damages as well as legal fees. Better to let court make the decision. Practice Pointer: Contact the Plan's liability insurance carrier and seek their advice - in writing.

If an interpleader is not yet appropriate in your jurisdiction, how about filing a declaratory judgment action against the claimant and let the court decide if he gets the money. The Plan Administrator should not allow himself to be placed in the position of making that determination. If the beneficiary designation was signed a few days before his death, the Participant may not have been of sound mind. He might have been in a coma. This situation doesn't pass the smell test. If you deny the claim because the claimant did not follow the procedures and did not use the forms set forth in the plan documents, you will have a justiciable dispute as the basis for declaratory judgment. The Plan Administrator should contact the Plan's liability insurance carrier and ask for guidance.

It is not clear whether you are dealing with a defined contribution plan like a 401(k) plan, or a cash balance pension plan, a defined benefit plan. If the QDRO was accepted by the Plan Administrator (you didn't say), then the Plan Administrator would normally contact the Alternate Payee and ask how he wants to receive his share, either as a rollover to an IRA or other eligible retirement account, or as a direct taxable distribution (but no 10% early withdrawal penalty if the Alternate Payee is under age 59-1/2). The Alternate Payee does not "remove the monies". And what do you mean when you say "as far as we can tell"? Who is we? What is your relationship to the matter? Why don't you know whether or not the money was removed? Haven't you talked with the Plan Administrator? In all events the amount payable to the Alternate Payee per the QDRO belongs to the Alternate Payee. If he dies before it was rolled over or distributed to him it will pass to his named beneficiary if one was designated by him, or to the default beneficiary named in the plan documents (spouse, children, parents, etc.), or to the Alternate Payee's estate where it will become: (i) part of the Alternate Payee's testamentary estate if he had a Will, or, (ii) pass by intestate distribution to those beneficiaries set forth in state law. If you don't provide the facts in full and if you don't ask the right questions you will not get the correct answers. DSG

The IRS provides that, for estate tax purposes, “A terminable interest in property is an interest which will terminate or fail on the lapse of time or on the occurrence or the failure to occur of some contingency. Life estates, terms for years, annuities, patents, and copyrights are therefore terminable interests. However, a bond, note, or similar contractual obligation, the discharge of which would not have the effect of an annuity or a term for years, is not a terminable interest.” See 26 CFR § 20.2056(b)-1. In Belthius v. Belthius, No. B315673, Court of Appeals of California, Second District, Division Two, (January 4, 2023) - https://scholar.google.com/scholar_case?case=12306033257629875954&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:14880692104701005079:AAGBfm2qi1_JaXLJvydb4f3quYTnTlLkbA&html=&pos=0&folt=kw . . .. . the wife submitted a draft QDRO to the court seeking to allocate her interest in the husband’s Los Angeles Fire and Police Pension Plan. The wife’s QDRO provided, inter alia, that: "[I]f [Angela]'s death occurs, [Angela]'s separate property interest established under this Order shall pass under [Angela]'s beneficiary designation on file with the Board or, if none, shall pass under [Angela]'s will or should [Angela] leave no will, shall pass by intestate succession." The trial court in Belthuis declined to enter the wife’s QDRO and instead entered the husband’s QDRO omitting the above quoted and highlighted language. The Court of Appeals held: “Family Code section 2610 was enacted to abolish the terminable interest rule (Regents of University of California v. Benford (2005) 128 Cal.App.4th 867, 874), which had previously "governed disposition of community property interests in retirement benefits upon the death of either of the spouses in dissolution proceedings" (In re Marriage of Powers (1990) 218 Cal.App.3d 626, 634 (Powers)). Under the terminable interest rule, "a nonemployee spouse's interest in pension benefits terminated on that person's death, so that the nonemployee spouse could not bequeath benefits by will. [Citations.]" (In re Marriage of Nice (1991) 230 Cal.App.3d 444, 451 (Nice).) "[A]brogation of the terminable interest rule means that a nonemployee spouse's community property interest is now inheritable. [Citation.]" (Nice, supra, 230 Cal.App.3d at p. 452; see also Powers, supra, 218 Cal.App.3d at p. 639 ["if the nonemployee spouse dies before the employee spouse, his or her interest in the employee spouse's pension plan does not revert to the employee spouse by operation of the terminable interest rule but becomes part of the nonemployee spouse's estate"].)” (Emphasis supplied.) Query: Does a Plan Administrator of an ERISA qualified plan have the authority to treat as a terminable interest what State law intended to be non-terminable, or what may be construed as implicitly terminable? In California there is a specific statute addressing the issue. In Maryland, my home state, the law authorizes the court to transfer an ownership interest in a pension or retirement plan,thereby evidencing an intention that the recipient Alternate Payee's ownership is not conditional, that is not terminable. This is an issue that comes up in connection with CSRS and FERS retirement annuity benefits. See my attached Memo. Thanks, David OWNERSHIP INTEREST 5 CFR 838.237(b)(3).pdf

Pam Shoup: Can you cite the ERISA section for your statement that money rolled over into a defined contribution plans can be subject to and in service distribution (not rollover) at any age and without the usual allowable hardship reasons. Thanks, David

Does the attached help? IRS Rollover Chart.pdf

If you furnish the EXACT name of the Plan we can tell you what sort of Plan you have. A "ension" Plan to many of us is a term of art meaning a defined benefit plan where you retire after a certain number of years or service or at a certain age and receive a lifely annuity based on your years of service and income history, and when you die there is a survivor annuity for a spouse or former spouse. Unless it's a cash balance plan you cannot look at a statement and know what the plan is worth. We use "retirement" plan is shorthand for a defined contribution plan like a 401(k) or a profit sharing plan or a 403(b) plan where there is a certain dollar amount in the plan that you can pay out to yourself when you leave the employ of the Plan Sponsor, for example, by rollover to an IRA account, or by direct taxable distribution, or in an annuitized payout. You can look at a periodic statement and know exactly how much is in the Plan. Since you used the word "freezing" you likely have a defined benefit plan of some sort. Here is an article explaining how it works - https://www.thebalancemoney.com/what-is-a-pension-freeze-5080121#:~:text=When a company wants to,participants may no longer grow. Here is another https://www.groom.com/wp-content/uploads/2017/09/33_FreezeArticle-PostPPA-Final.pdf

I have practiced family law for 55 years. The last 36 years I have spent trying to learn everything I could about competently transferring pension and retirement plans benefits between divorcing couples. It is not clear to me in your case if you are dealing with a defined contribution plan or a defined benefit plan or or a cash balance plan. It is not clear if the plan falls under one of the 163,000+ ERISA qualified plans, or under other Federal laws governing CSRS, FERS, FSPS and TSP, or under Military law, or whether it is one of the 10,000+ plus State, County or Municipal plans, or whether it's a Union Plan or a Church Plan or perhaps even an International plan. It seems that your client, who obviously performs his own surgery, is determined to be pennywise and pound foolish. You must NOT to offer him any advice lest he screw it up and blame you. You cannot save him but you can save yourself. They need a QDRO to make the transfer. The fact that you would even ask if they need a QDRO makes it clear that this is not your area expertise. One sure way of being sued for malpractice and charged with failing to adhere to the Rules of Professional Conduct is to involve yourself in an area of law you don't understand. Or worse, involve yourself in legal matters if you are not a lawyer. David Malpractive - Lawyer Liability in QDRO Cases - Willick.pdfTop-QDRO-Mistakes-Attorneys-Make-and-How-to-Avoid-Them (1).pdfShulman QDRO Handbook Table of Contents 2020.pdf

The proper phraseology for FERS and CSRS Orders administered by OPM is Court Order Acceptable for Processing - COAP. An Order labeled as a QDRO will be rejected See - https://www.ecfr.gov/current/title-5/chapter-I/subchapter-B/part-838 "A substantial number of State court orders are drafted under the mistaken belief that the Employee Retirement Income Security Act (ERISA) (29 U.S.C. 1001 et seq.) applies to CSRS benefits. Sections 1003(b)(1) and 1051 of title 29, United States Code, exempt CSRS from ERISA, because CSRS is a “governmental plan” as defined in section 1001(23) of title 29, United States Code. Accordingly, OPM does not honor ERISA Qualifying Domestic Relations Orders (QDRO's) except to the extent that the law governing CSRS expressly authorizes compliance with State court orders. OPM will honor the orders to the extent permitted by CSRS. However, many provisions of ERISA QDRO's are not authorized under CSRS. Most significantly, a court cannot require that payments to the former spouse begin before the employee actually retires (i.e., begins to receive benefits) and, unless the order expressly provides that the former spouse is entitled to a survivor annuity, the payments to the former spouse cannot continue after the employee dies." The rules are all different since CSRS and FERS is not under ERISA. Ex: Only shared interest allocations of benefits are available. No separate interest allocations are allowed. It is the full and unreduced "self only" amount of the Employee's/Retiree's retirement that is that is allocated, not the "gross" (the self only less cost of survivor annuity)" or "net". See 5 CFR 838.103. There are no joint and survivor annuity benefits. It's a "former spouse survivor annuity" The parties are identified as the Employee/Retiree and the Former Spouse. If the Former Spouse remarries prior to age 55 she irrevocable loses the survivor annuity whether or not it's in the COAP. The maximum survivor annuity for FERS is up to 50% of the self only amount of the retirement annuity. 55% under CSRS. There is a cost to the survivor annuity. 20% of the amount of survivor annuity selected payable monthly starting at the time the Employee enters pay status. It is imperative to state who will pay the the cost. If you are silent...the Employee/Retire pays it all. See 5 CFR 838.807(c). THE FACT THAT AN EMPLOYEE MAY RETIRE DURING THE MARRIAGE AND SELECT A MAXIMUM SURVIVOR BENEFIT ON THE APPLICATION FOR IMMEDIATE RETIREMENT (SEE ATTACHED) DOES NOT SURVIVOR A LATER DIVORCE. IT MUST BE REINSTATED BY A QDRO. Since the Employee may die in service you need to address the Basic Employee's Death Benefit. There is no cost and the benefit is huge. And the above if just the tip of the iceberg. There are defaults what will cause paid to your clients and must be addressed. See 5 CFR 838.237(c)(3). If it's FERS, don't forget the special annuity supplement. Don't forget to mention COLAs for the the retirement and survivor benefits. In many states, if the parties don't specifically identify survivor annuity benefit in their MSA, or of the judge doesn't mention it in the JAD, the Former Spouse will not get it .... period full stop. That's the law in Maryland and Tennessee. I don't know about New York. Your friend better find somebody in NY or anywhere for that matter before he/she is sued for malpractice and paid a visit by Bar Counsel for violation of the Rules of Professional responsibility. Treading on dangerous waters here. DSG Appl for Immediate Annuity CSRS SF2801.pdf Appl for Immediate Annuity FERS SF3107.pdf

You need to start with the premise that there never was a "loan". A loan is where you go to the bank and they give your the bank's money and you pay it back to the bank with interest. A 401(k) loan is where to go to your plan administrator and they give you your own money and your pay it back to yourself with interest. Once he left the company and they deducted the "loan" balance from his distribution and withheld taxes there was no "loan" left for him to repay....ever. It ceased to exist. What benefit would he accrue from paying back the loan. He cannot deduct it from his income. Tell him to make maximum contributions to the 401(k).

The plan documents may not require notice to and/or consent by the former spouse, but does the law underlying your plan have such a requirement? The problem is that you now have actual notice that there is an Alternate Payee who is entitled to a share of your Participant's 401(k) Plan. The underlying obligation is not set forth in the COAP - viewed by most courts as an enforcement tool like an attachment or garnishment. It's in the JAD or the MSA incorporated into the JAD. As the Plan Administrator you have a fiduciary obligation to both parties. Would you be fulfilling those duties if you paid out the full amount to the Participant? Most Plan Administrators who have received such actual knowledge refuse to make any distributions until the matter is resolved by the parties in court. One of the questions you need to consider is whether or not you have a duty to investigate the information you have have in hand. Read the two DoL Advisory Opinions attached. David

The plan documents may not require notice to and/or consent by the former spouse, but does the law underlying your plan have such a requirement? The problem is that you now have actual notice that there is an Alternate Payee who is entitled to a share of your Participant's 401(k) Plan and that the Participant plans to appropriate those funds to himself. As the Plan Administrator you have a fiduciary obligation to both parties. Would you be fulfilling those duties if you paid out the full amount to the Participant? Most Plan Administrators who have received such actual knowledge refuse to make any distributions until the matter is resolved by the parties in court. OPM takes the position that if they know about a divorce and that's all, not if a COAP was entered or if a share of the Employee's FERS retirement annuity was to pass to the Former Spouse, the put a freeze on everything. How do they find out? Usually to Employee removes the Former Spouse from FEHB insurance and the reason is "divorce". That's all it takes. One of the questions you need to consider is whether or not you have a duty to investigate the information you have have in hand. Read the two DoL Advisory Opinions attached. I think you turn a blind eye to the situation at your peril. David Advisory Opinion 1992-17A - duty of Plan Admin.pdf Advisory Opinion 1999-13A _ U.S - Sham Divorces.pdf

The Plan Administrator must pay the money in the account the children pursuant to its own rules saying that the money goes to the children. Kari E. Kennedy, Executrix v. Plan Administrator for Dupont Savings and Investment Plan, 129 S.Ct. 865, 555 U.S. 285 (2009). But read Andochick v. Byrd, 709 F.3d 296 (2013) dealing with post-distribution recovery by an intended beneficiary. However, under the Pension Protection Act of 2006 it is possible for the former spouse to return to the state court and seek a posthumous QDRO awarding the PSP proceed to her. But a promise in an Agreement to name your former spouse as the beneficiary in not the equivalent to a transfer of retirement benefits to the former spouse that is enforceable under ERISA by use of a QDRO, so I have my doubts that the QDRO is an appropriate remedy. A QDRO would effectively change the nature of the language of the Agreement. BUT the children were never the intended beneficiaries of the account at any time. The former spouse was the intended beneficiary and since she cannot sue the Plan, she would have to sue her children as unintended beneficiaries under Andochick. Perhaps she needs to sue her attorney for malpractice. A very thorough explanation of this entire issue is set forth at Hennig v. DIDYK, Tex: Court of Appeals, 5th Dist., No. 05-13-00656-CV, (2014) - https://law.justia.com/cases/texas/fifth-court-of-appeals/2014/05-13-00656-cv.html And the Plan Administrator should do nothing, or at the very most file an interpleader action and ask the court what to do with the money, and let the court figure it out. David

I live in a world where nobody has the right to do anything unless that right is bestowed upon them by law or by regulations that have the force and effect of law. A court cannot require the parties to carry life insurance to protect the children because there is no statute that says that they can do so. Nor can the court order the parties to pay for college, for the same reason, the law does not authorize it. Certainly there are situations that a right is bestowed if not prohibited, including the 10th Amendment to the Constitution - "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." But ERISA and the DoL control every breath taken by plan administrators, no? So let's assume that the Plan Documents actually do provide that a spouse's status as a beneficiary of a defined contribution plan is terminated upon her death and that we are not dealing with a divorce and a QDRO, and that the Participant neglects to submit a change of beneficiary form. Where in ERISA does is the Plan authorized to strip the decedent and her estate of her status of beneficiary when Participant later dies without having changed the beneficiary? I cannot find that in ERISA or in DoL regs. These two cases are right on point. PaineWebber v. East, 363 Md. 408, 768 A.2d 1029 (2001), and Kari E. Kennedy, Executrix v. Plan Administrator for Dupont Savings and Investment Plan, 129 S.Ct. 865, 555 U.S. 285 (2009), but maybe those plans didn't have such a clause in their plan documents, or were they prohibited from having them by ????? David

While it is not the job of a Plan Administrator to look behind the QDRO presented to them, read the two Advisory Opinions attached. In 1999-13A the author begins as follows: "This is in response to your request on behalf of the UAL Corporation (UAL) and United Air Lines, Inc. (United) for an advisory opinion. Specifically, you ask how a plan administrator should treat domestic relations orders the plan administrator has reason to believe are "sham" or "questionable in nature." Later on the Opinion continues: "You have asked for an advisory opinion as to whether, and if so when, a plan administrator may investigate or question a domestic relations order submitted for review to determine whether it is a valid “domestic relations order” under State law for purposes of section 206(d)(3)(B) of ERISA." The response was as follows inter alia: "When a pension plan receives an order requiring that all or a part of the benefits payable with respect to a participant be paid to an alternate payee, the plan administrator must determine that the judgment, decree or order is a “domestic relations order” within the meaning of section 206(d)(3)(B)(ii) of ERISA — i.e., that it relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child or other dependent of the participant and that it is made pursuant to State domestic relations law by a State authority with jurisdiction over such matters. Additionally, the plan administrator must determine that the order is qualified under the requirements of section 206(d)(3) of ERISA. It is the view of the Department that the plan administrator is not required by section 206(d)(3) or any other provision of Title I to review the correctness of a determination by a competent State authority pursuant to State domestic relations law that the parties are entitled to a judgment of divorce. See Advisory Opinion 92-17A (Aug. 21, 1992). Nevertheless, a plan administrator who has received a document purporting to be a domestic relations order must carry out his or her responsibilities under section 206(d)(3) in a manner consistent with the general fiduciary duties in part 4 of title I of ERISA." "For example, if the plan administrator has received evidence calling into question the validity of an order relating to marital property rights under State domestic relations law, the plan administrator is not free to ignore that information. Information indicating that an order was fraudulently obtained calls into question whether the order was issued pursuant to State domestic relations law, and therefore whether the order is a “domestic relations order” under section 206(d)(3)(C). When made aware of such evidence, the administrator must take reasonable steps to determine its credibility. If the administrator determines that the evidence is credible, the administrator must decide how best to resolve the question of the validity of the order without inappropriately spending plan assets or inappropriately involving the plan in the State domestic relations proceeding. The appropriate course of action will depend on the actual facts and circumstances of the particular case and may vary depending on the fiduciary’s exercise of discretion. However, in these circumstances, we note that appropriate action could include relaying the evidence of invalidity to the State court or agency that issued the order and informing the court or agency that its resolution of the matter may affect the administrator’s determination of whether the order is a QDRO under ERISA.5(5) The plan administrator’s ultimate treatment of the order could then be guided by the State court or agency’s response as to the validity of the order under State law. If, however, the administrator is unable to obtain a response from the court or agency within a reasonable time, the administrator may not independently determine that the order is not valid under State law and therefore is not a “domestic relations order” under section 206(d)(3)(C), but should rather proceed with the determination of whether the order is a QDRO." While it is possible under the law of some states to issue a QDRO without a divorce, in other states that is not the law. In my home state of Maryland for example, the applicable statute only grants the court authority to transfer pension and retirement benefits in connection with annulment or absolute divorce. If that does not happen and a transfer is made to the Alternate Payee in the absence of a divorce, the Participant is going to hear from the IRS and will be looking at being solely liable for income taxes on the taxable distribution (to the Alternate Payee), and excess distribution and early withdrawal penalties as well. The opposite is the case with FERS and CSRS and other Federal pensions administered by OPM. [But see below.] 5 CFR § 838.101 provides, inter alia: "In executing court orders under this part, OPM must honor the clear instructions of the court. Instructions must be specific and unambiguous. OPM will not supply missing provisions, interpret ambiguous language, or clarify the court's intent by researching individual State laws. In carrying out the court's instructions, OPM performs purely ministerial actions in accordance with these regulations. Disagreement between the parties concerning the validity or the provisions of any court order must be resolved by the court." And in Rosato v. OPM, 165 F.3d 1377 (U.S.C.A. Federal Circuit 1999), in holding that: “Federal law thus provides the method whereby divorcing spouses may divide their entitlements to federal employee benefits. The statute and rules are clear: OPM will not look behind a state court divorce decree or property settlement order to ascertain the intent of the parties. So long as the decree or order complies with the specificity requirements of the regulations, which implement the statutory requirement that the decree or order "expressly" direct payment to another than the employee, OPM will follow its prescriptions. An order lacking the requisite specificity will be rejected by OPM, with an opportunity for the applicant to cure any indicated error.” (Emphasis provided.) And in Hayward v. OPM, 578 F.3d 1337 (U.S.F.C 2009), where the issue was whether or not the parties intended to include survivor annuity benefits for the former spouse: “We recognize that "OPM is neither qualified nor obligated to resolve disputes about the import of state divorce decrees ... OPM's task is 'purely ministerial' with respect to court ordered property settlements." Perry v. Office of Pers. Mgmt., 243 F.3d 1337, 1341 (Fed. Cir. 2001) (quoting Snyder, 136 F.3d at 1477); see also 5 C.F.R. § 838.101(a)(2). We also recognize that "neither we nor the Board is permitted by the terms of 5 U.S.C. § 8341(h) to rewrite or equitably reform state court divorce decrees or settlement agreements that do not unambiguously provide for a CSRS annuity." Fox, 100 F.3d at 145. Thus, the intent to award a CSRS survivor annuity must be clear.” So there are any number of parties involved: (i) the parties themselves who are attempted to transfer retirement benefits in a situation, such as the entry of a final divorce, where they might otherwise have to wait; (ii) the trial judge who will likely sign anything put in front of him/her if it is by "Consent" of the parties; (iii) the attorneys for the parties who may have intentionally deceived the judge and may have the face the state Grievance Commission; (iv) the IRS who is likely to impose taxes on the Participant and not on the Alternate Payee; and, (v) the Plan Administrator who needs to decide how far to dig into the underlying state law in trying to determine is the DRO is qualified. Notwithstanding the CFR section and cases cited above, OPM requires that a court certified copy of the Court Order Acceptable for Processing be submitted with a court certified copy of the Judgment of Absolute Divorce, a copy of the signed Marital Settlement Agreement (if there is one), and a statement by the former spouse or by the former spouse's representative that, ". . . . the annexed COAP is currently in full force and effect and has not been amended, superceded or set aside by the Court." See Subpart B -Procedures for Processing Court Orders Affecting Employee Annuities, Sections 838.221, 838.224, 838.421, 838.425, 838.721, and 838.424. OPM, it seems, chooses to ignore the CFR Sections cited above. The case mentioned above, Jago v. Jago, 2019 PA Super 246, 217 A.3d. 289 (2019) involved a situation where a happily married parties filed a petition for the entry of a QDRO transferring $400,000 from the husband’s ERISA qualified plan to the wife’s IRA. No divorce action was pending and they admitted had they had no intentions of divorcing. The court analyzed ERISA and the REA and some of the major Federal court decisions and concluded that: “Here, Husband is a participant in an ERISA-governed plan. The parties initiated this case by filing a joint petition for entry of a QDRO for the sole purpose of transferring to Wife's IRA an amount of the Plan benefits, because Wife has a marital property interest in the Plan. See Brown v. Brown, 669 A.2d 969, 972 (Pa.Super. 1995), aff'd, 544 Pa. 360, 690 A.2d 700 (1997) (providing retirement pension benefits, vested and non-vested, are marital property rights subject to equitable distribution upon divorce). But see Boggs, supra. Without the entry of a valid QDRO, the parties' proposed transfer violates ERISA's anti-alienation prohibition. See id.; 29 U.S.C.A. § 1056(d)(1), (3)(A). In their joint petitions and throughout the life of this case, however, Husband and Wife have expressly acknowledged they are married with no pending divorce or other family law matter between them; the parties at no time stated or implied they intended to initiate a support action. Instead, the parties stated in their petitions they wished the Plan benefits to remain marital property upon entry of the proposed QDRO. Thus, the record makes clear there is no current, foreseeable, or desired divorce or domestic relations matter of any kind between Husband and Wife, which is required for the entry of a QDRO under ERISA. See Boggs, supra; Mackey, supra. Under these circumstances, the parties' joint petitions are attempts to circumvent ERISA's anti-alienation proscription. See Boggs, supra; Mackey, supra. The cited persuasive authority leads us to conclude a QDRO is a procedural right derivative of or adjunct to a domestic relations matter, but outside the context of a domestic relations matter, a QDRO is not a distinct, discrete legal claim. See Dorko, supra; Johnston, supra; Ryan, supra; Denaro, supra; Jordan, supra. Accordingly, Wife's claim that a domestic relations action is not a prerequisite to entry of a QDRO fails. “Based upon the foregoing, we hold that absent a divorce or other domestic relations matter pending between spouses, they cannot obtain a QDRO for the sole purpose of moving funds in the participant/spouse's ERISA plan out of the plan to the non-participating spouse.” (Emphasis supplied.) You can find the well written Jago opinion at - https://scholar.google.com/scholar_case?case=7016202236632377044&q=jago+v.+jago&hl=en&as_sdt=4,39 See DoL Advisory Opinion 90-46A, attached, that provides in pertinent part: “With respect to ERISA section 206(d)(3)(B)(ii)(II), it is the view of the Department of Labor that Congress intended the QDRO provisions to encompass state community property laws only insofar as such laws would ordinarily be recognized by courts in determining alimony, property settlement and similar orders issued in domestic relations proceedings. We find no indication Congress contemplated that the QDRO provisions would serve as a mechanism in which a non-participant spouse's interest derived only from state property law could be enforced against a pension plan.” Game, set, match. Add one more factor - the Maryland case of Rohrbeck v. Rohrbeck, 318 Md. 28, 566 A.2d 767 (1989) holds that a QDRO is an enforcement tool only, like a garnishment or an attachment, and is NOT the underlying source of the obligation to transfer retirement benefits set forth in the QDRO. The source of the obligation is the Marital Settlement Agreement incorporated into the Judgment of Absolute Divorce, or, in the absence of a Marital Settlement Agreement, the Judgment of Absolute Divorce itself. This view is held my most states where I have researched the issue. So it become obvious again that without a divorce and a Judgment of Absolute Divorce, you cannot have a valid and enforceable QDRO. To quote Dirty Harry. Advisory Opinion 1999-13A _ U.S - Sham Divorces.pdf Advisory Opinion 1992-17A - duty of Plan Admin.pdf DoL Advivory Opinon 1990-46a.pdf

In what way did he "elect" a lump sum? Do you claim that you did not have notice of that election of a lump sum? How is "benefit commencement date" defined? Does "benefit commencement date" mean the same thing for a lump sum payment and an annuitized payout? How is "death benefit" defined? Is the cause of death a factor in whether there is or is not a death benefit? How is the death benefit computed? If he hadn't elected a death benefit would you have been required under ERISA to pay a survivor benefit to the surviving spouse? Have you computed the present value of that survivor benefit? Is it more or less than the lump sum? How much will it cost you in legal fees paid to your attorneys and to the attorney for the surviving spouse if you have paid her the lowest possible amount? What is the dollar difference between the present value of the survivor annuity and the lump sum and the death benefit? Can the lump sum or the death benefit rolled over by the surviving spouse to an IRA or other eligible retirement account? What are the differences between the lump sum payment and the death benefit? Is it possible that the death benefit is actually a separate benefit in the form of life insurance? [I had a case many years ago where a county pension plans was drafted in such a way that, unbeknownst to the county, there were survivor benefits payable to the non-spouse beneficiary, and also the decedent's surviving child. https://scholar.google.com/scholar_case?case=14512325294449180586&q=angerman&hl=en&as_sdt=4,21 David

Can I assume that this is a cash balance plan?

Read this case from the U.S. District Court in Georgia dealing with the naming of a beneficiary of a pension plan. - https://scholar.google.com/scholar_case?case=7964216609854086279&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:17102308171145443235:AAGBfm2dXJvPo0nUQKlDLqIPUBXxyXMitw&html=&pos=0&folt=kw Who is responsible for the chaos described? The Participant who had no idea what he was doing? The Plan Administrator who obviously was not paying attention to the actions of the Participant and his violation of Plan requirements? The Sponsor who adopted Plan rules that clearly were not understood by the Plan Participant? Lots of lessons here. I suspect the case will be appealed.

C.B. Zeller is right. No human or computer can divide anything exactly into thirds. Somebody has to get the extra penny. The same is true of other fractional divisions come to think of it.

Responding to Peter, there are plenty of cases explaining the reach of Federal preemption under ERISA. Forristall v. Federal Express, Civil Action No. 13-11454, United States District Court, D. Massachusetts (November 21, 2014) Smithson v. Smithson, Civil Action No. 1:15-0583, United States District Court, S.D. West Virginia, Bluefield (2015) McCarthy v. Estate of McCarthy, No. 14-CV-6194 (JMF), United States District Court, S.D. New York (2015) Cunningham v Hebert, Case No. 14 C 9292, United States District Court, N.D. Illinois, Eastern Division. November 1, 2016 In re: Marriage of Steiner and Steiner, No. D071155, Court of Appeals of California, Fourth District, Division One (November 30, 2017) Prudential Insurance Company of America v. McFadden, Civil Action No. 6:19-CV-051-CHB, (USDC, ED Ky 2020) The one thing I have learned in the practice of law is that you can never take anything for granted. State courts are happy to dodge hard issues if they can use "Federal preemption" as a convenient shield." They are like the sword of Damocles hanging about. And if they cannot use Federal preemption, state courts have other ways to avoid the enforcement and collection of post-distribution suits of pension and retirement benefits. They will use the state statute of limitations, the doctrine of laches, res judicata, collateral estoppel, failure of the court to reserve jurisdiction to address such issues, expiration of the time limits imposed by the Rules of Procedure that permit a party to file Motions to alter or amend a Court Order, or to revise, vacate or reform a Court Order or other document, or to remedy an inequity on the grounds of basis of "fraud", "mistake" or "irregularity". Here is a 2019 article from the ABA on Federal preemption that does not mention Andochick and the ability of the intended beneficiary to file a post distribution suit to get around the result in Kennedy. Also attached is my Memo re: workarounds to the outcome in Kennedy. David ERISA Preemption - ABA 2019.pdf RETIREMENT AND LIFE INSURANCE BENEFITS ERISA PREEMPTION etc.pdf