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Betcha the Participant is trying to keep a spouse from receiving any share of the Participant's account without having to first terminate his/her employment. Do your Plan documents or the governing law or regs require notice to or consent by a spouse? See https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-hardship-distributions ...that starts with: "Although not required, a retirement plan may allow participants to receive hardship distributions. A distribution from a participant’s elective deferral account can only be made if the distribution is both: >Due to an immediate and heavy financial need. >Limited to the amount necessary to satisfy that financial need." How can the Plan Sponsor comply with this requirement by allowing an employee to self-certify that they are telling the truth. How about due diligence? Check out all of the links at the bottom of the IRS page and tell the Plan Administrator to ask their lawyer for advice so they will have somebody to sue when the Plan Administrator is sued.

Are you sure it's a 401(a) Plan? Who is the employer/sponsor of the Plan? What's the exact name of the Plan? Was the beneficiary actually named on a beneficiary form submitted by the decedent? Or did the Plan follow an "order of preference" in making the payout?

Nobody on this blog can give you a valid response unless we can read the QDRO - all of it, every page. You can redact it by crossing out the case number and the names of the parties and attach it to your response. Do not redact the State where it was entered since that may be important with respect to whether or not the court still has jurisdiction to amend the QDRO. Do not redact the name of the Plan since that will matter since there are tens of thousands of different plans that operate under various Federal statutes, state, county, city and municipal plans, and they do not all operate in the same manner. . And you need to confirm that the QDRO was approved by the Plan and has been making payments to your ex-wife since your retirement. If there is a separate Order for alimony, such as the Judgment of Divorce, redact and attach that as well. We will then be in a position to help. You need to keep in mind that a QDRO is a division of PROPERTY accrued during the marriage. Alimony is not considered property. DSG

Let me start with you last question, "Would the same be true in scenarios where the participant divorced many years ago, they subsequently got remarried, and the benefit is payable to the new spouse. In these scenarios, the new spouse is almost never able to locate the divorce documentation." If the Participant retires and has remarried before a QDRO is submitted to the Plan, the former spouse loses all rights to a survivor annuity benefit. Such benefits vest in the new spouse and the former spouse is SOL. See the 1997 decision of the US Court of Appeals, 4th Circuit, in Hopkins v. AT&T Global Information Solutions, 105 F.3d 153 (USCA 4th Cir. 1997) at http://scholar.google.com/scholar_case?case=9954117838131396049&q=hopkins+at%26T+global&hl=en&as_sdt=2,9 followed by the 5th Circuit in Rivers v. Central and South West Corporation, 186 F.3d 681 (United States Court of Appeals, 5th Cir. 1999) at- http://scholar.google.com/scholar_case?case=2296953953561556363&q=rivers+central+and+south+west&hl=en&as_sdt=2,9: "This Circuit agrees with the Fourth Circuit's decision in Hopkins and adopts its rationale. Rivers failed to protect her rights in Franklin's pension plan by neglecting to obtain a QDRO prior to Franklin's retirement date. Consequently, Franklin's pension benefits irrevocably vested in Mrs. Franklin on the date of his retirement and Rivers is forever barred from acquiring an interest in Franklin's pension plan." To the same effect see Dahl v. Aerospace Employees' Retirement Plan, a 2015 case from the U.S. District Court for the Eastern District of Virginia (and cases cited therein) - https://scholar.google.com/scholar_case?case=3487596170773082469&q=dahl+v.+aerospace&hl=en&lr=lang_en&as_sdt=20000003&as_vis=1 Other cases following Hopkins are collected at: https://scholar.google.com/scholar?start=0&q="Hopkins+v.+AT%26T"&hl=en&as_sdt=20000006 See also Vanderkam v. PBGC, 943 F. Supp.2d, 130 (2013) setting forth a thorough discussion of this issue. As far as actual notice is concerned, here are some reading materials: Two DoL Advisory Opinions making it clear that the Plan need look behind QDROs it receives to see it it conforms to State law or is for any reason irregular. Their only focus is to determine whether or not it's a QDRO under ERISA. Brown v. Continental Airlines, Inc., 647 F.3d 221, 223 (5th Cir. 2011) (“[ERISA § 206(d)(3)(D)(I)] does not authorize an administrator to consider or investigate the subjective intentions or good faith underlying a divorce.”) - https://casetext.com/case/brown-v-continental-airlines-inc. See also Blue v. UAL Corp., 160 F.3d 383, 385 (7th Cir. 1998) (“ERISA does not require, or even permit, a [retirement plan] to look beneath the surface of the order. Compliance with a QDRO is obligatory[.]”) - https://casetext.com/case/blue-v-ual-corporation#p385. And see Matthew v. E.I. Dupont, 3rd Cir. 2017, citing Blue and Brown: “Additionally, DuPont's interpretation subverts the deference owed to state-court QDROs by ERISA plan administrators. Our sister circuits have explained that "ERISA does not require, or even permit, a pension fund to look beneath the surface of the order." Brown v. Cont'l Airlines, Inc., 647 F.3d 221,227 (5th Cir. 2011) (citations omitted); see also Blue, 160 F.3d at 385. Here, the terms of the QDRO support Matthews' interpretation.” The point is that if a plan is not required or even permitted to look behind an actual QDRO that they have in hand, it would make no logical sense for the Plan to be required to engage in a search for a (potentially) missing QDRO. The estate or the new beneficiary can search the court files, contact the lawyers for the parties in the state court proceeding, see if they can find a Marital Settlement Agreement (MSA) incorporated into a Judgment of Divorce (JoD), or, if there was no MSA, whether or not the JoD itself addressed the allocation of pension benefits, and if a QDRO was ever entered by the Court and if anyone asked for a certified copy and sent it to the Plan. All of this is not the Plan's problem. In some states, like my home state, Maryland, if the MSA for the JAD do not specifically address and award survivor benefits the Alternate Payee does not get them no matter what is in the MSA or the JoD. I have had this sort of happen with both ERISA and non-ERISA plans. Federal employees who divorce will cancel the health insurance for their former spouses and that's enough for OPM to generate a letter asking for a copy of the MSA when the employee files his Application for Retirement, or the JoD, or the Court Order Acceptable for Processing. This is despite the fact that OPM acts pursuant to rules similar to those discussed above. For example: 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." 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." and see Beckstead v. Office of Personnel Management, 842 F. App'x 578 (USCA Fed Cir 2021) - https://scholar.google.com/scholar_case?case=13223774605474473561&q=beckstead+v.+opm\&hl=en&as_sdt=3,29 So I would give them a finite period of time (not the inapplicable 18 months) to produce evidence that a QDRO exists. If they cannot, then that's the end of it. Under the Pension Protection Act of 2006 it became possible for a court to enter a posthumous (post mortem) QDRO. BUT, many state will not enter such orders if the request is not made within a certain period of time (ex: 30 day appeal time), or within the time set forth in the applicable statute of limitations. In the Federal system they have the draconian "1st Order Rule" - 5 CFR §838.806 provides that OPM will not enforce a court order awarding survivor annuity benefits if the order is issued after the date of retirement or death of the Employee/Retiree AND seeks to amend or replace the first order dividing marital property between the Employee/Retiree and the Former Spouse. An order that seeks to award or eliminate a survivor annuity benefit, or to increase or reduce the amount therefor, or to explain, interpret or clarify the foregoing, must be issued on a day prior to the death or retirement of the Employee, or it must be the first order dividing marital property of the Employee/Retiree and the Former Spouse. Usually it is NOT the first order. The first order is the JoD. David Advisory Opinion 1992-17A - duty of Plan Admin.pdf Advisory Opinion 1999-13A _ U.S - Sham Divorces.pdf

Have you notified his spouse of his request for a hardship distribution? Or to get his/her consent? Does the Plan require you to do so.

By what authority did the Plan Administrator transfer retirement benefits between divorcing spouses without a QDROs? Did I miss the Memo?

Since Jack is not an attorney and has wasted everybody's time with 24 posts and a refusal to take any suggestions offered to him, the odds are pretty high that the QDRO will not be accepted.

There is actually a case out there (I can't find it at the moment that held that the plan cannot allocate plan benefits 1/3rd to each beneficiary since, e.g. $100,000/3 = $33,333.333333333333 and that in our monetary system you can only divide money up to 99 pennies past the decimal point. So they reverted to the default order of precedence. The same would true any number that extend beyond 2 spaces past the decimal point.

My Gains and Losses Memo addresses gains and losses in multiple contexts. The underlying concept is the same. The Alternate Payee's share should be adjusted from the valuation date to the date of transfer the Alternate Payee. That date of transfer can be to a separate account in the same plan for the Alternate Payee's benefit, or a rollover to an IRA or other eligible retirement account, or a direct taxable distribution. The QDRO can address a percentage or a dollar amount and both can be adjusted for gains, losses and investment experience. It is a two edged sword. So you don't think that this concept of "ownership interest" is unique to Maryland and to the cases I have cited, take a look at every case in the US that has addressed 5 CFR 838.237(b)(3). There is some duplication from the Gains and Losses Memo. There is a malpractice case pending in Maryland where the the parties agreed to a lump sum and did not address gains and losses. The attorney for the Alternate Payee decided to add gains and losses and nobody noticed. That decision, coupled with inexplicable delay by the attorney in getting a QDRO entered by the Court and sending a certified copy to the Plan Administrator, resulted in an over $300,000 loss of value of the Alternate Payee's share. Many plans have default provisions that either adjust for gains and losses, or not, unless otherwise set forth in the QDRO. Peter speaks to the obligation of the Plan Administrator to consider state law. He is right. I have often found it necessary to send this letter to the Plan Administrator: I want to bring the following matters to your attention. 1. The QDRO I prepared was approved by both parties. 2. The QDRO was signed by the Court and a certified copy forwarded to you. 3. By law you act as a fiduciary with respect to both parties. ERISA § 404(a)(1) and ERISA § 409. I would like to bring to your attention a number of relevant authorities that deal with your ability as the Plan Administrator to “look behind” a QDRO that has been submitted to you. A 1992 ERISA Advisory Opinion suggests a plan’s administrator need not review the correctness of a State court’s decision about whether a person is, under a State’s domestic-relations law, the participant’s spouse, former spouse, child, or “other dependent”. See ERISA Adv. Op. 92-17A (Aug. 21, 1992) (A plan’s administrator may treat as a participant’s former spouse for QDRO purposes a person the State court decided was never the participant’s spouse.)- https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/a dvisory-opinions/1992-17a.pdf. Brown v. Continental Airlines, Inc., 647 F.3d 221, 223 (5th Cir. 2011) (“[ERISA § 206(d)(3)(D)(I)] does not authorize an administrator to consider or investigate the subjective intentions or good faith underlying a divorce.”) - https://casetext.com/case/brown-v-continental-airlines-inc. See also Blue v. UAL Corp., 160 F.3d 383, 385 (7th Cir. 1998) (“ERISA does not require, or even permit, a [retirement plan] to look beneath the surface of the order. Compliance with a QDRO is obligatory[.]”) - https://casetext.com/case/blue-v-ual-corporation#p385. And see Matthew v. E.I. Dupont, 3rd Cir. 2017, citing Blue and Brown: “Additionally, DuPont's interpretation subverts the deference owed to state-court QDROs by ERISA plan administrators. Our sister circuits have explained that "ERISA does not require, or even permit, a pension fund to look beneath the surface of the order." Brown v. Cont'l Airlines, Inc., 647 F.3d 221,227 (5th Cir. 2011) (citations omitted); see also Blue, 160 F.3d at 385. Here, the terms of the QDRO support Matthews' interpretation.” But that does not relieve the attorneys who prepare QDROs to abide by the laws in force in their state. The Plan cannot look at a plan that says ownership interest and gains and losses and decide to ignore it. David OWNERSHIP INTEREST 5 CFR 838.237(b)(3).pdf

I would be more interested to know whether or not, if the Participant and his spouse divorce after the purchase of the lifetime annuity, a court enters a QDRO awarding the Alternate Payee a lump sum transfer of $2.425 million, whether that required lump sum transfer would supersede the lifetime annuity that the Participant purchased. Or can the QDRO provide the Alternate Payee be awarded an if, and and whey payout of the lifetime annuity received from time to time by the Participant?. Or can the QDRO provide that the plan provide the Alternate Payee with the equivalent of a 50% QJSA? I have been raising these issues since Secure 1.0 and never received a response. Thanks, David

The jokes write themselves. See https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-hardship-distributions Do you need to notify and/or have the consent of the spouse or former spouse? Be careful. A pending divorce can get you caught in a lawsuit. Repeat these word - Fiduciary duty to all participants and beneficiaries. What is a failed septic system anyway? It usually happens slowly. You don't wake up one day and it's failed. The people who clean the septic system periodically can tell you if it's failing. I'm not sure this passes the smell test. Yes - I been there and done that. What verification do you have that the septic system has failed. They can usually get it fixed temporarily before the do major repairs just by having it pumped out. I smell a rat. David

Let's talk about the LAW. It will require some reading. See the attached Memo addresses cases from all over the US. In Maryland gains and losses and investment experience are implicit since out law authorizes the Court to award an OWNERSHIP INTEREST in a pension or retirement plan and treats the Participant as a trustee for use of benefit of the Alternate Payee. Get back to me with any questions. Gains, Losses, Investment Exp - 09-29-2022.pdf

Do we know for certain whether or not the participant understood the differences between traditional and Roth deferrals? Were those differences explained to the participant by the plan administrator? In writing Is the Plan administrator required to provide such explanations to the participant? Was the election for confusing? Ex: [ ] Roth [ ] Traditional I have more than a few times been confused about which box to check, the one before or the one after. Do you see 0% or 1% on the carton of mlk below? I would be stunned that any regular employee would have a clue about all to the differences between Roth and traditional deferrals.

There are defined contribution plan that can generate a statement on a daily basis. Most send a statement monthly, some quarterly and I have seen a few that only value Participant's account only on December 31st each year. The citation from Gina seems to confirm that 12 months is the mandatory time for benefits statements.

See my comments in bold type. P and K divorced 7/29/15. Decree says P is to split 401k from marriage 1997 to divorce w k. QDRO finally started in 11/23, signed by courts 3/24. 401k plan transferred to IRA by P’s previous Employer. Unknown to both P and K. What do P and K stand for? QDRO relates to 401k not IRA and does not correspond with decree, (K manipulated documents and P signed thinking the had to match decree or courts wouldn’t have signed, not the case) So it’s a blessing that it got transferred to an IRA. When P contacted 401k company-Fidelity to see if QDRO was being processed in March, that is when he found out about it being transferred to Insperia Financial as an IRA. That company does not process QDRO and Ca Labor Retirement Service stated that QDRO is not Valid as it relates to a 401k not and IRA. Insperia Financial says that P and K have to agree on either a percentage or an amount. Funds are locked down until then. Most large IRA custodians do not require a court order to transfer IRA account balances in connection with a divorce. They have their own forms. See attached Fidelity form. I cannot find a comparable form at the website of Insperia Financial. That doesn't mean that they don't have one. You will have to contract them and ask. The problem is that all of the forms require the parties to attach a copy of the Court Order or Judgment of Divorce that directs the transfer. Here is a pretty generic Order to transfer IRA account balances. The first problem you have is that the 401(k) Order cannot be used to to transfer IRA balances. You need a new Court Order. Will the court have jurisdiction to enter a new Order? Good question. The law will vary in different states. There may be a statute of limitations that will deprive the court of jurisdiction, or the doctrine of laches may apply, of the trial court may not have expressly retained jurisdiction to enter a new order. One other problem you may encounter is that IRA custodians are unable or unwilling to adjust for gains and losses (like a 401(k) or other defined contribution plan will do) and you will have to present evidence that the 401(k) would have increased in value from the valuation date to the date you client receives her share. Likely an stockbroker or financial analyst or CPA will need to testify. See my Gains and Losses Memo. And as soon as you file a court proceeding you may find that the Participant will move his IRA to a bank in his brother's name is Toronto, or will take it out and hide it under a mattress or in a bank in Tierra del Fuego. You can always file suit against the Participant for contempt and ask for a just with pre-judgment interest at your state's legal judgment rate. And while you are filing suit, file a claim with the grievance commission in your state and allege that the attorney failed to adhever the the competence requirements of the Rules of Professional Competence, and file for malpractice as well. Here are a number of documents that relate to the standard of care, not only in Maryland, but nationwide. See particularly the Memo re: Consequences of Delay. k won’t sign unless the split of the 401k includes Child Support and Alimony as well. K has now levied P bank acct for child support and on Sept 9 a withholding order will take the total child support from his IRA, K is willing to sign for a lump sum agreed amount. Allocation of retirement and pension benefits have nothing to do with child support and alimony, unless of court the purpose of the transfer was to recover alimony and/or child support arrears. In most states the payment of child support is viewed as a DUTY while the payment of retirement benefits is viewed as a debt. Good luck, David Question: Can a settlement agreement be made, staying the they agree on this amount, and that it covers the split, child support, and alimony. Have them both sign with notary. Is that legal to be done? If so do you know someone who could it? Fidelity IRA Form.pdf DRAFT IRA ORDER.pdf Grievance Comn v. Fisher.pdf Grievance Comn v. Gray.pdf Grievance Comn v. Hill.pdf Grievance Comn v. Kovacic.pdf Grievance Comn v. Tolar.pdf JLG Article - It Ain't Over.pdf List of Defined Contribution & Benefit Plans- Qualified or Not - 6-4-21 (3).pdf Malpractive - Lawyer Liability in QDRO Cases - Willick (1).pdf Notice of Adverse Claim- Interest Cover Letter (2).pdf Notice of Adverse Claim-Interest.pdf Potts re Time to Prepare QDRO.pdf QDROS -MALPRACTICE AND RULES OF PROFESSIONAL CONDUCT.pdf Shulman QDRO Handbook Table of Contents 2020 (1).pdf Top-QDRO-Mistakes-Attorneys-Make-and-How-to-Avoid-Them (1) (2).pdf CONSEQUENCES OF DELAY 04-15-24.pdf Gains, Losses, Investment Exp - 09-29-2022.pdf

"I received half of my exes retirement. IF YOU RECEIVED YOUR HALF, WHY ARE YOU POSTING THIS MESSAGE? I ASSUME YOU MEANT THAT THE COURT AWARDED YOU "HALF" IN THE JUDGMENT OF DIVORCE OR BY INCORPORATING A WRITTEN AGREEMENT INTO THE JUDGMENT OF DIVORCE, BUT YOU FIRST SENTENCE IS NOT CLEAR. WHAT WE NEED IS A TIMELINE. IF THERE WAS A WRITTEN AGREEMENT, WHAT WAS THE DATE OF THAT AGREEMENT? WHAT WAS THE DATE OF THE JUDGMENT OF ABSOLUTE DIVORCE? WHAT WAS THE DATE THE QDRO WAS FIRST SENT TO THE PLAN ADMINISTRATOR? WHAT DID THE PLAN ADMINISTRATOR SAY WAS THE REASON THE QDRO WAS SENT BACK TWICE? The QDRO has been sent back twice. In the mean time ex was terminated from job. WHEN WAS YOUR EX TERMINATED FROM HIS JOB? HAS HE REMOVED ALL OF THE FUNDS FROM HIS RETIREMENT ACCOUNT THAT I ASSUME WAS A 401(K)? IF IT WAS NOT A 401(K) WHAT WAS IT? The agreement to give half was awarded in the final decree. Would plan give him all of retirement because he was fired before the plan approved the QDRO? TIMING IS EVERYTHING. IF HE TERMINATED HIS EMPLOYMENT, WHETHER FIRED OR QUIT, AND NO QDRO HAD BEEN SUBMITTED TO THE PLAN ADMINISTRATOR, HE COULD TAKE EVERYTHING OUT OF HIS 401(K) WITHOUT NOTICE TO YOU AND WITHOUT YOUR CONSENT. IF YOUR ATTORNEY SENT A "NOTICE OF ADVERSE INTEREST/CLAIM" TO THE PLAN ADMINISTRATOR IMMEDIATELY AT THE TIME THE AGREEMENT WAS SIGNED OR THE JUDGMENT OF DIVORCE WAS ENTERED, THE PLAN ADMINISTRATOR WOULD LIKELY HOLD ONTO YOUR SHARE PENDING AGREEMENT OF THE PARTIES OR ORDER OR COURT. YOU CANNOT GET A USEFUL ANSWER TO YOUR QUESTIONS UNLESS YOU SET FORTH ALL THE FACTS. IT WOULD HELP IF YOU GAVE US NAME OF THE PLAN YOU ARE DEALING WITH SINCE THEIR ARE 175,000 DIFFERENT PENSION AND RETIREMENT PLANS IN THE USA AND YOU ARE ASKING US TO GUESS.

Let me further clarify my thoughts. I am thinking when ERISA requires a married and retiring Participant to elect a QJSA, that election is already "net" of the cost of the QJSA, and that election survives the divorce (unlike FERS and CSRS and Military elections). See Vanderkam v. Vanderkam, 776 F.3d 883, 892 (D.C. Cir. 2015), and the excellent District Court opinion at Vanderkam v. PBGC, 943 F.Supp.2d 130 (USDC - DC Cir. 2014), and a well written case Setzer v. Michelin Retirement Plan - C.A. No. 3:13-cv-00192-MGL - https://scholar.google.com/scholar_case?case=4368934987489954107&q=Setzer+v.+Michelin+Retirement+Plan&hl=en&scisbd=2&as_sdt=3,110,125 If the Court can reallocate the cost to the Alternate Payee, that will reduce the Alternate Payee's share of the retirement annuity, and in my humble opinion violates the intention of Congress that the Alternate receive a QJSA with the costs already deducted. How then can a local state judge reduce the Alternate Payee's share without violating the intention of ERISA? BTW, I cannot find any statutory law in my home state, Maryland, that gives the court the authority to allocate the cost in a way different from "off the top". And I am not aware of any Plan that addresses the issue other that to "just say no", we don't allocate. Nor I cannot find anything in ERISA or REA that mentions the cost. The SCOTUS decisions in Carmona and Engelhoff and New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. and Kennedy, among others, are pretty firm when it comes to preemption. The rules of statutory interpretation are that the legislative body says what it means and means what it says, and if it don't say something it intended not to say it, and it is presumed to act with knowledge of how its enactments will impact all other existing laws. In my neck of the woods, the DC Metro Area, we have hundreds of thousands of Federal Employees and Retirees and everybody knows that OPM will allocate the cost of the survivor annuity in any manner directed by the parties. And everybody knows that even though DFAS will not allocate the cost of SBP benefits, there if an Excel program created by Marshal Willick that can be used to to so via the back door. See attached. I have been in touch with Brett Turner of "Equitable Distribution of Property" by Thomson Reuters and he referred me to Section 6:46 of this treatise and he doesn't know where the authority comes from to allocate the cost other than, perhaps, the assumption that there is no preemption in this area. It seems to me that from a dollars and cents point of view it's a big enough issue that it should have been addressed....but it wasn't. Check with your Plan Administrator clients and see is any of them have a written protocol for handling a situation where the parties (or the trial judge) wants to allocate the cost of the QJSA to the Alternate Payee? And what is their legal rationale for that protocol. Sorry, but I love being the provocateur. David Press-Release-for-SBP-Premium-Calculator (1).pdf Universal-SBP-Premium-Shifting-Calculator-in-Excel.xls

In an ERISA Qualified Plan the Participant retired during the marriage of the parties and elected a 50% QJSA for his then current wife as he was required to do by law by Federal law. ERISA § 205(a)-(d), 29 U.S.C. § 1055(a)-(d) Now, 6 years later, cometh the divorce, and the Participant wants his now ex-wife, the Alternate Payee, to pay the cost of the QJSA election, that is, the actuarially deduction from his retirement annuity to fund the survivor annuity and achieve actuarial equivalence pursuant to ERISA §§ 205(d)(1)(B), (d)(2)(A)(ii), 29 U.S.C. §§ 1055(d)(1)(B), (d)(2)(A)(ii) and ERISA § 204(c)(3), 29 U.S.C. § 1054(c)(3). Problem 1 - the Plan Administrators, like most Plan Administrators I have dealt with, have refused to allocate the cost to the ex-wife and to deduct that cost from the ex-wife's share of the retirement annuity. Problem 2 - I cannot find any authority to confirm that ERISA permits the parties to agree, on the courts to compel, the cost of the survivor annuity to be paid by an Alternate Payee. The sections of ERISA require the Participant to elect a QJSA, but is silent about the "cost". Any ideas? Thanks.

As for the Federal view, see this DOL pamphlet attached, and you can find it at - https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/qdros.pdf - Go to Question 1.2, 6th paragraph on page 5 where it says, "There is no requirement that both parties to a marital proceeding sign or otherwise endorse or approve an order." [ERISA §§ 206(d)(3)(B)(ii), 514(a), 514(b)(7); IRC § 414(p)(1)(B)] [The same language is found in Gary Shulman's treatice, "Qualified Domestic Relations Handbook", 4th. Ed., Section 18.01.] Many courts are appointing Special Masters to sign for and on behalf of the recalcitrant party. See for example: In re: Matter of Jioie v. Hosier, Ariz: Court of Appeals, 1st Div., Dept. E 2012, 1 CA-CV 11-0333 A. - http://scholar.google.com/scholar_case?case=15008890219389579531&hl=en&lr=lang_en&as_sdt=2,9&as_vis=1&oi=scholaralrt the court appointed a special master to prepare the QDRO and ordered the parties to share the cost. In re the Marriage of Phipps and Phipps, No. A163407, Court of Appeals of California, First District, Division Three, Filed May 30, 2024 - https://scholar.google.com/scholar_case?case=9594494900687241931&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:14880692104701005079:AFWwaeYSZAD9szjlrGc6DdHWflSn&html=&pos=1&folt=kw the Court ordered the husband to sign the QDRO and when he refused the Court directed the Clerk of the Court to sign an “elisor”. In California, an elisor is a person appointed by a court to perform tasks such as signing or executing documents on behalf of a party who refuses to do so. The court's power to appoint an elisor is outlined in California Code of Civil Procedure Section 128(a)(4). This power permits the Court “(4) To compel obedience to its judgments, orders, and process, and to the orders of a judge out of court, in an action or proceeding pending therein.” The use of an “elisor” in common in California - https://scholar.google.com/scholar?hl=en&as_sdt=20000006&q=elisor+"qdrp&btnG= In Military cases see 10 U.S.C. 1408 - Payment of retired or retainer pay in compliance with court orders - at Section (a)(2) defining "court order" does not require that such an Order be signed or approved by the parties. Most states, like Maryland, view a QDRO as an enforcement tool, like a garnishment or an attachment. See Rohrbeck v. Rohrbeck, 318 Md. 28, 566 A.2d 767 (1989), where the court said: ""As is evident from this discussion, the QDRO has become an order of high significance in State domestic relations practice. An attempt to cause pension plan benefits payable to one party to be paid to an alternate payee, whether through an attachment in aid of a support obligation or pursuant to the Marital Property Disposition Act (Md. Fam.Law Code Ann. § 8-205) can succeed only through the mechanism of a QDRO. See Fox Valley & Vicinity Const. Workers v. Brown, 879 F.2d 249, 252 (7th Cir.1989): "[E]RISA preempts any attempt to alienate or assign benefits by a domestic relations order if that order is not a QDRO." See also Cummings Techmeier v. Briggs & Stratton, 797 F.2d 383 (7th Cir.1986). Absent such a qualified order, not only will the pension plan administrator refuse to implement the court's decision, but, given the anti-alienation provisions extant in both the labor and tax codes, coupled with the preemption provision of ERISA § 514 (29 U.S.C. § 1144), there is at least a reasonable argument that a non-qualified order may be invalid even as between the parties." * * * * ". . . .we therefore expressly recognize the ability of a party otherwise entitled to a QDRO to obtain one as an aid to enforcing a previously entered judgment." Nobody would expect this type of court order to require the approval of the parties, especially the party whose assets are being taken. The practice of having a Court Order approved by the attorneys is a matter of courtesy. It would be inappropriate to submit a court order without giving the opposing counsel the right to review and approve it, vel non. Somehow this morphed over to the litigants themselves. But there is a reason. Most attorneys know so little about QDROs that they don't want to put themselves in malpractice jeopardy by approving a QDRO. So they have passed it over to the client instead. If a party does not want to sign, file a Motion for Entry of QDRO without his/her cooperation. I have never seen a court refuse such a request. In some cases they court wants to hear the testimony of an expert. DoL QDRO Memo.pdf

You first need to know whether or nor the Plan is governed by the Federal law, ERISA, and if he retired during the marriage or after the divorce. So you first job is to tell us the exact name of the Plan, or you can look it up yourself at https://www.efast.dol.gov/5500Search/ where all ERISA qualified plans must file a form 5500 every year. You can search by plan name or by the plan sponsor. The Plan might be governed by another Federal law (such as FERS or CSRS or the Military or the Foreign Service) or by a State, County, City or Municipal plan, and in some plans the election of a survivor annuity for a former spouse does not survive the divorce and must be crated or reinstated by a QDRO style document. QDRO stands for Qualified Domestic Relations Order and only apply to ERISA qualified plans. Other plans use other name such as Eligible Domestic Relations Order, Domestic Relations Order, Retirement Benefit Order, etc. The failure of the lawyer who represented the former spouse in this case might be sued for malpractice and incompetence for not following up and making sure the QDRO was entered by the Court and approved by the Plan Administrator. The good news you are looking for is that it is in fact an ERISA plan that would be subject to the Pension Protection Act of 2006 that permits the entry of a QDRO post mortem. The bad news this that if the Participant remarried and then retired his new spouse would be entitled to the survivor annuity and not the former spouse. See for example, Hopkins v. AT&T Global Information Solutions, 105 F.3d 153 (1997) at http://scholar.google.com/scholar_case?case=9954117838131396049&q=hopkins+at%26T+global&hl=en&as_sdt=2,9 followed by the 5th Circuit in 1999 Rivers v. Central and South West Corporation, 186 F.3d 681 (United States Court of Appeals, 5th Cir. 1999) at- http://scholar.google.com/scholar_case?case=2296953953561556363&q=rivers+central+and+south+west&hl=en&as_sdt=2,9 and a number of other cases. If you want to send me a copy of the Marital Settlement Agreement and the Judgment of Divorce and the exact name of the Plan I might be able to figure out you situation find a lawyer in your state that would be able to help. My email is marylandmediator@gmail.com.

I didn't want to confuse the issue, but this is FERS retirement annuity. At OPM "self only annuity" means the full and unreduced annuity. "Gross annuity" is the "self only annuity" less the cost of the survivor annuity (10%/month of the "self-only annuity). "Net annuity" is defined at 5 CFR 838.103 as - "Net annuity means the amount of monthly annuity payable to a retiree or phased retiree after deducting from the gross annuity any amounts that are— (1) Owed by the retiree to the United States; (2) Deducted for health benefits premiums under 5 U.S.C.8906 and 5 CFR 891.401 and 891.402; (3) Deducted for life insurance premiums under 5 U.S.C. 8714a(d); (4) Deducted for Medicare premiums; (5) Properly withheld for Federal income tax purposes, if the amounts withheld are not greater than they would be if the retiree claimed all dependents he or she was entitled to claim; (6) Properly withheld for State income tax purposes, if the amounts withheld are not greater than they would be if the retiree claimed all dependents he or she was entitled to claim; or (7) Already payable to another person based on a court order acceptable for processing or a child abuse judgment enforcement order. Unless the court order expressly provides otherwise, net annuity also includes any lump-sum payments made to the retiree under 5 U.S.C. 8343a or 8420a." I am sorry if it took you off track. Thanks for the cites. I did find one case, Chiarello v. Internal Revenue Service, Case No. 4-06cv-163-BE, United States District Court, N.D. Texas, Ft. Worth Division (2006) - citing 26 CFR § 1.61-11 - https://www.law.cornell.edu/cfr/text/26/1.61-11 David

>There is no question that, except for defined benefit plan payments made to a spouse or former spouse for child support, the amount paid to a spouse or former spouse via a QDRO (as alimony or as an allocation of property) is taxable income to the alternate payee. But I cannot find the section of the IRC or the Regs that say that. It is set forth in IRS Publ. 504 and 575, but the source is not stated. Whoops. I just found https://www.law.cornell.edu/cfr/text/26/1.61-11#:~:text=CFR-,§ 1.61-11 Pensions.,income unless excluded by law. Any other citations? >For the first time is 38 years of preparing QDROs I have an attorney for the Participant insisting that the allocation of a defined benefit plan be computed with respect to the "net" (not the gross) annuity payments paid to the participant, that is, net of the participants state and federal tax withholding, Social Security and Medicare taxes, health insurance and life insurance premiums, and the cost of the survivor annuity. I pointed out that we NEVER use "net" since the amount is subject to manipulation by the participant and because is forces the alternate payee to pay part of the participant's taxes (what the hell?), but I have been looking for a learned treatise, or law review article, or even caselaw, that sets forth a better and more authoritative argument. Anybody? Thanks, David

Say what?

Follow up - from Justice Kagen's dissent in Loper Bright Enterprises v. Raimonda. "In particular, the majority’s decision today will cause a massive shock to the legal system, “cast[ing] doubt on many settled constructions” of statutes and threatening the interests of many parties who have relied on them for years. 588 U. S., at 587 (opinion of the Court). Adherence to precedent is “a foundation stone of the rule of law.” Michigan v. Bay Mills Indian Community, 572 U. S. 782, 798 (2014). Stare decisis “promotes the evenhanded, predictable, and consistent development of legal principles.” Payne, 501 U. S., at 827. It enables people to order their lives in reliance on judicial decisions. And it “contributes to the actual and perceived integrity of the judicial process,” by ensuring that those decisions are founded in the law, and not in the “personal preferences” of judges. Id., at 828; Dobbs, 597 U. S., at 388 (dissenting opinion)."

The following cases hold that if a divorce Participant has remarried and retired before a QDRO has been perfected, Federal law holds that the Participant's new spouse vests in the right to receive the survivor annuity and the former spouse (prospective Alternate Payee) irrevocably(?) loses the right to receive that survivor annuity. Hopkins v. AT&T Global Information Solutions, 105 F.3d 153 (USCA 4th Cir. 1997) - at http://scholar.google.com/scholar_case?case=9954117838131396049&q=hopkins+at%26T+global&hl=en&as_sdt=2,9 followed by Rivers v. Central and South West Corporation, 186 F.3d 681 (USCA 5th Cir. 1999) at- http://scholar.google.com/scholar_case?case=2296953953561556363&q=rivers+central+and+south+west&hl=en&as_sdt=2,9 Dahl v. Aerospace Employees' Retirement Plan, a 2015 case from the U.S. District Court for the Eastern District of Virginia (and cases cited therein) - https://scholar.google.com/scholar_case?case=3487596170773082469&q=dahl+v.+aerospace&hl=en&lr=lang_en&as_sdt=20000003&as_vis=1 See also Vanderkam v. PBGC, 943 F. Supp.2d, 130 (2013) setting forth a thorough discussion of this issue. And the 2015 case of Dahl v. Aerospace Employees' Retirement Plan, No. 1:15cv611 (JCC/IDD), United States District Court, E.D. Virginia, Alexandria Division. https://scholar.google.com/scholar_case?case=3487596170773082469&q=dahl+v.+aerospace&hl=en&lr=lang_en&as_sdt=20000003&as_vis=1 But I come across statements from time to time that if the new spouse consents to waiving her right to survivor annuity benefits (how that happens is never addressed), then a QDRO can be effective to restore survivor annuity benefit to the former spouse. I also have contemplated what would happen is the new spouse predeceased the Participant, or if the Participant and the new spouse divorced, whether not a new QDRO could restore QJSA rights to the former spouse? Any ideas? Case law? Statutory references? Thanks, David