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A Court Order Acceptable for Processing (COAP) is a court order that us used to transfer retirement and survivor annuity benefit from a Government employee under FERS or CSRS or the FSPS to a former spouse. It serves the exact same purpose as a QDRO that is used to transfer pension and retirement benefits in private company plans under a number of Federal laws - ERISA, the IRC, the REA and the PPA of 2006. 99.9% of the time it is a stand alone order that can be 7 to 9 pages long if you address all of the possible issues. Most states regard a COAP or a QDRO as an enforcement tool, like a garnishment or an attachment, to enfore an obligation seet forth in the Judgment of Divorce. OPM will accept a Judgment of Divorce as a COAP if it has ALL of the information required by their Regulations. See attached. One problem is that in most states the COAP can be amended if there is a problem, whereas the ability to amend the Judgment of Divorce may expire after the 30 appeal time has run. The COAP needs to address, for example. (i) the formula for determining the amount of retirement benefit to be paid to the former spouse; (ii) the percentage of survivor annuity benefits to be paid to the former spouse if the employee predeceases; (iii) who will pay the cost of the survivor benefits (if the COAP is silent, the full cost is paid by the employee); (iv) the award of Basic Death Benefits; (v) disability retirement; (vi) what will happen to the former spouse's share if she predeceases the employee? (vii) and more. NOTE: If a Fedeal Employee has a CSRS or FERSf retirement annuity, he/she will also likely have a TSP account. DSG Handbook for Attorneys OPM.pdf

I suspect the judge meant defined contribution plans and defined benfit plans. In a defined contribution plan like a 401(k) the Court would have specified an amount or a percentage as of a certain valuation date that she was to receive and if that amount would include or exclude loans and if the amount awarded was to be adjusted for gains and losses from the valuation date to the date of transfer to you. With regard to a defined benefit plan, in my State of Maryland and in other states (Iowa and Tennessee and maybe others) if the Court does not specifically mention surivor annuity benefits in the divorce degree, the former spouse does not receive them...full stop. So you need to ask you lawyer if that is true in your state as well. And in a definined benefit plan the Court would have had to specify the amount or percentage or a formula to compute the amount of retirement annuity that your former spouse was receive. And if survivor annuity benefits were awarded, the divorce decress woud have to state the amount or percentage or a formula to compute the amount of the former spouse's share and who was to pay the cost of this survivor benefits. As for health care, she cannot be on your health care plan after the divorce. She will have COBRA benefits through your employer for 36 months at her expense. Courts only have the power to do what State and Federal law authorize them to do. I have never seen a state law that give a court to order a party to order a party to provide health insurance to a spouse beyond the termination of the marriage. If the Court is concerned about the former spouse's abilty to pay for health insurance, the Court will order the payment of alimony. When your provide the complete language of divorce decree we may be able to help you. David

Hardship distributions are "in service" distributions. There is no need for a hardship distribution if the Participant is no longer an employee, that is, no longer "in service". As a former employee he can take any distribution or roll over that he may elect without having to justify the need for it. DSG

From having prepared QDROs for the past 38 years I can tell you that almost no non-qualified plans will enforce a DRO. I have found only two exceptions - some of the non-qualified plans at Lockheed-Martin, and one non-qualified plan an General Electric. In the event that the employer/Plan Sponsor goes out of business or files for Bankruptcy, the Participants become unsecured general creditors and stand in line with all other unsecured creditors. Since most non-qualified plans will exist before the divorce and will be ongoing after the divorce, and will likely increase or decrease in value in the future based on performance criteria that may relate backwards and/or forwards, but in all events will make it almost impossible to figure out the value of the marital share at the time of the divorce and the value of the marital share years down the road where some or all of the change in value may be due to post marital effort by the employee, or by the division in which the employee works, or by the company as a whole. The only reported case in the US discussing the valuation of a non-qualified and unfunded deferred compensation plan is Douglas v. Douglas, 281 A.D.2d 709, 722 N.Y.S.2d 87 (2001), holding that a non-qualified and unfunded deferred compensation plan was capable of being valued for marital property purposes. Said the Court: “Next, plaintiff argues that his ability to collect from the unfunded, non-qualified retirement plan is too speculative to be valued as a marital asset. In support of his argument, plaintiff points out that since the plan is unfunded, payments are dependent upon the partnership remaining profitable and that to be eligible, one must be a partner for 10 years, be 50 years of age, not leave to compete with the partnership in another firm, and retire. Since plaintiff was not 50 years of age on the date that the action was commenced, his expert attempted no valuation of his interest, asserting that it was valueless. To the contrary, non vested pensions are subject to equitable distribution (see, Burns v Burns, supra, at 376) and the uncertainty associated with the fulfillment of the conditions precedent to the receipt of such nonvested pensions does not present a significant impediment to a fair and realistic distribution of this type of asset (see, id., at 376). “Defendant's expert, on the other hand, noted that no partner had left plaintiff's firm to work for a competing firm in over 50 years and that historically the partnership was profitable enough to make payments called for by the plan to retired partners. Moreover, the expert assumed, and the record discloses no evidence to the contrary, that plaintiff would continue as a partner (in fact, he has more than 10 years as a partner in the firm and is now age 50), and he valued plaintiff's interest in the retirement plan at $412,700, $460,400 or $479,400, depending on whether plaintiff retired at age 50, 56 or 62. Given the uncontroverted evidence of valuation, Supreme Court did not abuse its discretion by accepting the valuation ascribed by defendant's expert (see, Ferraro v Ferraro, supra, at 598). Lastly, there is no merit to plaintiff's contention that the Majauskas formula (see, Majauskas v Majauskas, 61 NY2d 481) [time value with coverture fraction] should have been employed by Supreme Court since this formula need not be used where, as here, "a lump-sum payment discounted for present value" may be made to effectuate distribution of pension benefits (Mullin v Mullin, 187 AD2d 913, 915; see, Majauskas v Majauskas, supra).” See also an interesting case from Louisiana, Knobles v. Knobles, 236 So. 3d 726 (La Court of Appeals, 5th Cir. 2017, where the Louisiana Court of Appeals held that a “restoration plan” adopted long after the termination of the marriage was computed with reference to time during the marriage that the Participant was employed by the company in question. Said the Court: “Although Mark did not qualify for the Restoration Plan until his compensation from Chevron exceeded the applicable annual compensation limit, well after the community ceased to exist, the benefits Mark will receive under the Restoration Plan are calculated based in part on his credited service years accumulated during the existence of the community with Kay. Mark's years of employment during the marriage factored into his right to receive the increased accrued benefits of the Restoration Plan once it became effective and Mark met the requirements; thus, the community has an interest in the whole of the accrued benefit. See generally, De Montluzin v. Martinez, 94-1805 (La. App. 4 Cir. 2/23/95); 652 So.2d 71, 76-77, rehearing denied, (La. App. 4 Cir. 4/19/95). Because Mark's years during the marriage were used to determine his eligibility for participation in the Restoration Plan, we find that Kay is entitled to a right-to-share in one-half of the portion of the plan that is a community asset, despite the fact that a determinative value came into existence many years after the dissolution of the marriage. See, Sims, supra. Although the Consent Judgment between the parties anticipated the community property portion of the Restoration Plan as an undiscovered asset, Kay would have ultimately been entitled to that community asset through applicable jurisprudence and community property laws.” But see D.S. v. D.S., 217 Conn.App. 530, 289 A.3d 236 (2023) that reached the opposite conclusion as the Douglas case. In D.S. the decision was based on the opinion of the expert, Harrison, a CPA, that: "As an initial matter, Harrison noted, the provisions for retirement payments set forth in the partnership agreement are not funded and are not carried on the firm's books as a liability. Rather, retirement payments are disbursed from the firm's future earnings. Harrison found it significant that the provision for retirement payments is subject to termination or reduction at any time by a vote of the firm's partners. Harrison pointed out, as well, a provision in the partnership agreement reciting that the payments to a retiree could be adjusted by the firm's compensation committee and the concurrence of a certain number of partners on their determination that the payments are no longer fair to the remaining partners or the firm, or are otherwise inappropriate or inequitable to the former partner. Retirement payments also could be adjusted, deferred, or simply not paid, if the payments to retired partners exceed a certain percentage of the firm's income. In that event, the partnership agreement provides, payments to retirees may be deferred and not paid for up to five years and, if the payments cannot be made during the period of deferral, the obligation of the firm to make payments could be extinguished forever. Distinguishing the partnership retirement provisions from a qualified pension plan, Harrison characterized the defendant's potential to receive retirement payments from the firm as "the epitome of a mere expectancy." (Emphasis supplied.) Brett Turner, Editor of Westlaw's Equitable Distribution of Property, commented on D.S. v. D.S. is as follows. “Unvested and Uncertain Benefits. In D. S. v. D. S.,[new note 26.4] the wife was a partner in a law firm. The firm's partnership agreement provided "that a partner who has reached the age of fifty and completed at least ten years of service, may retire and receive a stream of payments."[new note 26.5] The potential benefits "are not funded and are not carried on the firm's books as a liability. Rather, retirement payments are disbursed from the firm's future earnings."[new note 26.6] In the past, "the firm had changed the formula by which a retiree's pay is determined as the firm's demographics have changed to reflect the greater number of retirees visà-vis active partners,"[new note 26.7] and these changes actually reduced the wife's potential benefits. A financial expert testified for the wife that the stream of benefits was too uncertain to constitute property. The trial court agreed, and the appellate court affirmed. “D. S. reached the wrong result. While the amount of benefits likely to be received was difficult to predict in advance, there was no evidence suggesting that the wife was likely to receive nothing. The right to payment appears to have been considerably more certain than a stock option, which has a substantial chance to be worth nothing if the stock price is less than the option's strike price. See §§ 6:48-6:49; see generally Bornemann v. Bornemann, 245 Conn. 508, 752 A.2d 978 (1998) (holding that stock options are property). The court should have held that the right to payment was property, and divided it by deferred distribution, awarding the husband a stated percentage of whatever payments the wife ultimately did receive. “D.S. is especially troubling because the wife's right to payment may very well have been carefully designed to maximize the likelihood that the payments would not have to be shared with a partner's spouse. The result suggests it is possible for an employer to carefully design a benefit program which gives substantial payments to employees, but which includes just enough uncertainty to avoid division of the benefits at divorce. D.S. therefore poses a significant potential threat to the policy that retirement benefits earned during the marriage are marital property. “Future cases should hold that unvested retirement benefits are property unless it is entirely speculative whether any benefits will be received at all. On the facts of D.S., there was a possibility that the wife’s benefits might be reduced, but there was no actual likelihood that the wife would receive nothing at all.” Changing to the issue of whether or not "unfunded" is even defined by ERISA, in Demery v. Extebank Deferred Comp. Plan (B), 216 F.3d 283, 285 (2d Cir. 2000), the Second Circuit addressed whether a plan was unfunded where: 1) the employer took out life insurance policies on its employees to help pay for its obligations under the plan and 2) the proceeds of the policies were kept in an account entitled Deferred Compensation Liability Account. In Demery, the court first recited its previous holding that a plan is unfunded where "benefits thereunder will be paid solely from the general assets of the employer." Id. (citing Gallione v. Flaherty, 70 F.3d 724, 725 (2d Cir. 1995)). Then, the court adopted the following inquiry as instructive: "can the beneficiary establish, through the plan documents, a legal right any greater than that of an unsecured creditor to a specific set of funds from which the employer is, under the terms of the plan, obligated to pay the deferred compensation?" Id. (quoting Miller v. Heller, 915 F. Supp. 651 (S.D.N.Y. 1996)). Applying the above test, the court held that the plan was unfunded. Id. at 287. Of particular importance was the plan's express terms, which stated: "[T]he Employer's obligation to make payments to any person under this Agreement is contractual and ... the parties do not intend that the amounts payable hereunder be held by the Employer in trust or as a segregated fund for the Employee.... The benefits provided under this Agreement shall be payable solely from the general assets of the Employer, and neither the Employee, the Beneficiary, nor any other person entitled to payments ... shall have any interest in any specific assets of the Employer by virtue of this Agreement. Employer's obligation under the Plan shall be that of an unfunded and unsecured promise of Employer to pay money in the future." Id. Based on those terms, the court concluded that the participants did not have a greater legal right to insurance proceeds than that of an unsecured creditor, thus the plan was unfunded as a matter of law. Id. Other circuits addressing this issue have reached similar conclusions. See Reliable Home Health Care, Inc. v. Union Cent. Ins. Co., 295 F.3d 505, 514 (5th Cir. 2002) (holding that a plan was unfunded for purposes of ERISA, even though plan benefits were technically funded through an insurance policy, since plan participants did not own the insurance policies, and their only right under the plan was to designate death beneficiaries); Belsky v. First Nat. Life Ins. Co., 818 F.2d 661, 663 (8th Cir. 1987) (holding that a plan was unfunded where an employer "obtained the insurance policy with the intention that it could be used in funding the Plan" but "the language of the Plan ... specifically avoids making a direct tie between the insurance policy and the Plan"). See In re IT Group, Inc., 448 F.3d 661, 669-670 (3d Cir. 2006) (finding a plan to be unfunded where the related Rabbi trust documents specified that the trust "shall not affect the status of the Plans as unfunded plans" and that "Trust assets are subject to creditors' claims in the event of insolvency, and that such claims are on par with those of Plan participants"); see also U.S. Dep't of Labor Opinion Letter 91-16A (July 2, 1991) ("[A] plan will not fail to be `unfunded' ... solely because there is maintained in connection with such plan a `Rabbi trust.'"). See Colburn v. Hickory Springs, No. 5:19-CV-139-FL, United States District Court, E.D. North Carolina, Western Division (2020), see: - https://scholar.google.com/scholar_case?case=1317766776274361048&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:17102308171145443235:AAGBfm2dXJvPo0nUQKlDLqIPUBXxyXMitw There are lots of non-qualified plan out there. See my Memo attached. Start at page 29 with respect to non-qualified plans that almost never cannot be enforced with a DRO. If you can find a plan that has a grant date for the benefit, and a vesting date you can formulate the language necessary for an Agreement, not a DRO. For example if the grant date is during the marriage and the vesting date takes place during the marriage the entire profit, income or gain will marital property and will be marital property and become divisible at the time it turns into cash by whatever means that may be. And the former spouse will receive 50% of such profit, income or gain net of the Participant's taxes and the cost of monetization. If the grant date is during the marriage and the vesting date takes place after the divorce, profit, income or gain will marital property and will become divisible at the time it turns into cash by whatever means that may be. The former spouse's share will be 50% the amount of such income, profits or gain net of the Participant's taxes and the cost of monetization multiplied by a fraction where the numerator is the number of months from the grant date to the divorce, and denominator is the number of months from the grant date to the vesting date. Do you really want to wallow into these thickets? David List of Defined Contribution & Benefit Plans- Qualified or Not - 04-14-2023.pdf

https://www.bloomberglaw.com/external/document/X34LHKL4000000/retirement-benefits-professional-perspective-spousal-consent-req

I assume the parties are still married and have signed an Marital Settlement Agreement (MSA) with a mutual waiver of retirement AND survivor annuity benefits in ERISA qualified defined benefit plans. There is no question that the waiver of retirement benefits is valid. The only relationship the Plan Administrator has with respect to the retirement benefits is to obey a valid QDRO, if there is one. With regard to the survivor benefit that I assume are QPSA and QJSA, the law mandates that a former spouse be named to receive those benefits, but I have seen many hundreds of cases where the prospective Alternate Payee waives those benefits in an MSA and where the QDRO affirmative states that the survivor annuity benefits are waived. But what if there is no QDRO because, as in this case, the parties have waived both retirement and survivor annuity benefits? The answer is that the Participant notifies the Plan Administrator of the waiver language in the MSA providing whatever proof is required by the Plan documents. What you seem to be talking about is where there is a waiver but the Participant fails to change the beneficiary. If you are talking above a defined contribution plan there is a potential beneficiary but it's not a QPSA or a QJSA unless the defined contribution plan has an option for an annutized payout. If you are talking about a defined benefit plan then there is no "beneficiary" there is only an Alternate Payee who will in most all cases be a new spouse. https://www.law.cornell.edu/cfr/text/26/1.401(a)-20 So that gets is to Kari E. Kennedy, Executrix v. Plan Administrator for Dupont Savings and Investment Plan, 129 S.Ct. 865, 555 U.S. 285 (2009) which you can find at - https://scholar.google.com/scholar_case?case=16253581861885772265&q=Kari+E.++Kennedy,+Executrix+v.++Plan+Administrator+for+Dupont+Savings+and+Investment+Plan,+129+S.Ct.+865+(2009)&hl=en&as_sdt=20000003 where the plan in question sounds very much like a defined contribution plan: "The SIP [Savings and Investment Plan) is an ERISA "`employee pension benefit plan,'" 497 F.3d 426, 427 (C.A.5 2007); 29 U.S.C. § 1002(2), and the parties do not dispute that the plan satisfies ERISA's antialienation provision, § 1056(d)(1), which requires it to "provide that benefits provided under the plan may 869*869 not be assigned or alienated."[1] The plan does, however, permit a beneficiary to submit a "qualified disclaimer" of benefits as defined under the Tax Code, see 26 U.S.C. § 2518, which has the effect of switching the beneficiary to an "alternate ... determined according to a valid beneficiary designation made by the deceased." (Emphasis supplied.) In Kennedy the Judgment of Divorce stated that the wife, "is ... divested of all right, title, interest, and claim in and to ... [a]ny and all sums ... the proceeds [from], and any other rights related to any ... retirement plan, pension plan, or like benefit program existing by reason of [William's] past or present or future employment." Unfortunately the husband never executed a new beneficiary designation and at his death the Plan paid over the benefits to wife. The Supreme Court held that the Plan was required to pay the benefits to the named beneficiary. But in Footnote 10 they said: "Nor do we express any view as to whether the Estate could have brought an action in state or federal court against Liv to obtain the benefits after they were distributed. Compare Boggs v. Boggs, 520 U.S. 833, 853, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997) ("If state law is not preempted, the diversion of retirement benefits will occur regardless of whether the interest in the pension plan is enforced against the plan or the recipient of the pension benefit"), with Sweebe v. Sweebe, 474 Mich. 151, 156-159, 712 N.W.2d 708, 712-713 (2006) (distinguishing Boggs and holding that "while a plan administrator must pay benefits to the named beneficiary as required by ERISA," after the benefits are distributed "the consensual terms of a prior contractual agreement may prevent the named beneficiary from retaining those proceeds"); Pardee v. Pardee, 2005 OK CIV APP. 27, ¶¶ 20, 27, 112 P.3d 308, 313-314, 315-316 (2004) (distinguishing Boggs and holding that ERISA did not preempt enforcement of allocation of ERISA benefits in state-court divorce decree as "the pension plan funds were no longer entitled to ERISA protection once the plan funds were distributed")." (Emphasis supplied.) Since the Kennedy case there have been many dozens of cases permitting post-distribution suits under various theories such as breach of contract, unjust enrichment, and constructive trust. In Andochick v. Byrd, 709 F.3d 296 (2013), a case originating in Maryland, the United States Court of Appeals, Fourth Circuit, answered the question left open in the Kennedy case, this is, whether an action could be brought against the recipient of life insurance proceeds (or retirement benefits) by reason of having been the named beneficiary of a company plan covered by ERISA, and restore those benefits to the person who equitably should have received such benefits. The issue was stated by the Court as follows: “Scott Andochick brought this declaratory judgment action, asserting that ERISA preempted a state court order requiring him to turn over benefits received under ERISA retirement and life insurance plans owned by his deceased ex-wife, Erika Byrd. ERISA obligates a plan administrator to pay plan proceeds to the named beneficiary, here Andochick. The only question before us is whether ERISA prohibits a state court from ordering Andochick, who had previously waived his right to those benefits, to relinquish them to the administrators of Erika's estate.” The Court held: “Finally, as the Third Circuit recently explained when addressing facts nearly identical to those at hand, “the goal of ensuring that beneficiaries ‘get what's coming quickly’ refers to the expeditious distribution of funds from plan administrators, not to some sort of rule providing continued shelter from contractual liability to beneficiaries who have already received plan proceeds.” Estate of Kensinger v. URL Pharma, Inc., 674 F.3d 131, 136 (3d Cir.2012). Permitting a post-distribution suit against a plan beneficiary based on his pre-distribution waiver does not prevent the beneficiary from “get[ting] what's coming quickly.” Rather, as the district court noted, it merely prevents him from keeping what he “quickly” received. Thus, we conclude that permitting post-distribution suits accords with the ERISA objectives discussed in Kennedy.” (Emphasis supplied.) A 2014 case out of Texas summarized the law on this issue in detail. Hennig v. DIDYK, Tex: Court of Appeals, 5th Dist., No. 05-13-00656-CV, 438 S.W.3d 177 (2014). See - https://scholar.google.com/scholar_case?case=1419348984792461652&q=Hennig+v.+DIDYK,+&hl=en&scisbd=2&as_sdt=4,44 It is worth reading. I am not sure about the history of this: https://www.taxnotes.com/research/federal/irs-guidance/notices/irs-provides-sample-language-on-spouses-rights-to-survivor-annuities/1fs5c See - https://qdrohelper.com/waiver-qdro/ and - https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/advisory-opinions/2000-09a That's about all I can tell you without know more of the facts and a timeline. David

A loan from a Participant's defined contribution plan is not a "loan" at all. It's a misnomer. When he takes a loan from his plan account he is borrowing his own money. When he pays it back he is paying it back to himself and is paying interest to himself. He is only disadvantaged by the fact that the amount of the loan is not part of his account for the purposes or being credited/debited with gains, losses and investment experience, dividends and interest, etc. It is like taking $20 out of the cookie jar in the kitchen and putting $21 back in the jar next week. Thinking of a 401(k) "loan" like you think about a loan from a bank is not helpful and leads to this sort of discussion thread. If, (i) the guy doesn't pay it back within the required time, and if (ii) he had not previously taken a distribution or rolled over his account balance to an IRA or other eligible account (in which events you would have reduced such distribution or rollover by the amount of the loan remaining due), then issue a 1099-R and be done with it. Please don't tell me how his money is not in a segregated account for his sole benefit but is part of the entire 401(k) so that you are really borrowing from the entire plan account. That may be technically true but is meaningless. His periodic statement of benefits defines his share balance, outstanding "loans", and payments made.

The amount of the loan is deducted from his defined contribution plan account when he requests a distribution. There is no logic in requiring the participant to pay back the loan only to add it back to his account at the time of distribution.

Wait! This gal is a new participant? What has she been doing for the past 16 years? Did she hold another job during those past 16 years? Did that job provide her with pension and retirement benefits? By not pursing a divorce for 16 years has she presumptively given her husband a good shot at receiving 50% of those pension and retirement benefits? N.B. there is nothing in the law that requires married couples to live together. [Religious beliefs don't matter under ERISA.] A 16 year separation with no divorce sounds like a voluntary arrangement. Does he have pension and retirement benefits to which she might be entitled? And now she is concerned about his consent to naming someone else? There are more questions here than answers. Tell her to file for divorce and the problem will disappear. Here is a decent summary of the matter - https://www.sslawoffices.com/retirement-planning/401k-beneficiary-rules-based-on-marital-status/#:~:text=If you are married%2C by,spouse to sign a waiver.

There is no doubt that the Participant is entitled to name a beneficiary or beneficiaries to all of his assets including those within a defined contribution plan (that I assume this is but you didn't say). The Participant's account does not revert to the Plan so it has to go somewhere. This places to name a beneficiary includes the execution of a Last Will and Testament with respect to houses, cars, furniture, investments, boats, yachts and airplanes and most other stuff with respect to which do not pass by operation of law, like life insurance or T/E real property or a beneficiary designation. If the deceased dies intestate (without a Will) and fails to name a beneficiary, or if the beneficiary previously designated predeceases the Participant, or if the deceased failed to name a beneficiary with respect to ALL of his 401(k) plan account, there are two places to look. (i) The Plan document may itself provide that in the absence of a beneficiary designation the asset with pass to specified categories of people. For example, under Federal TSP the order of preference is: 1. To your widow or widower. 2. If none, to your child or children equally, and descendants of deceased children by representation. 3. If none, to your parents equally or to the surviving parent. 4. If none, to the appointed executor or administrator of your estate. 5 If none, to your next of kin who is entitled to your estate under the laws of the state in which you resided at the time of your death. (ii) If the Plan does not have such a provision the assets wind up in probate court and pass according to the decedent's Will if he dies testate, or, if he died intestate then in the order of preference set forth in state law. I don't think you can suggest that the now mortis est Participant really meant to leave 100% to the beneficiary in this case. It would be more logical to conclude that Participant intended to leave the 2nd 50% to the fist person on this blog to use the Latin phrase mortis est.* David *Dead is.

Peter: I am the moderator of a 1350 member listserv that I created in 2011 as a sort of CLE a teaspoon-at-a-time supplement to the rather meager CLE offerings to family lawyers in the State of Maryland. Lawyers in Maryland and in 4 other states have no CLE requirement. The other 45 states and the District of Columbia and the Virgin Island and Puerto Rico and Guam and American Samoa and the Northern Marianas all require CLE, but we Maryland lawyers are just too superior for that nonsense. One of my daughters, a CPA is required to take 80 hours of continuing education every two years to retain her certification. Real estate professional must take 15 hours every two hears. The gal that cuts my hair and the guy that checks out my HVAC system and the guy that fixes my toilet must all take continuing education courses. My cardiologist is required to take his Board Certification exam every 10 years. He asked me how I would like to take the Bar Exam every ten year and I immediately had a heart attack at the very thought. See attached requirement in Maryland. I have been ranting and raving about various issue for the past 13 years and have put together a 930 page compilation of what I call Monographs dealing with topics I have encountered in my 57 years of law practice, 38 years of which have been devoted to the preparation of QDROs. I have spoken to gatherings of state and local Bar association and to groups of Judges. I have testified as an expert witness in Court many times. But in the end of the day I am beating my head against the wall. I could make a lot of money testifying against my colleagues for their flagrant malpractice. The judges are no better, but you can't sue them. I feel like a modern day Diogenes, wandering about, carrying my lamp, looking for a man with mind open to observing, analyzing, and reasoning. Continuing Education in Maryland.docx

Nobody on his blog can answer your questions without knowing more information than you have provided. You have referred to a "QDRO" but it is my experience that lay people (and Judges) use that acronym generically even it does not relate to an ERISA qualified benefit. They use it when discussing as IRA and plans sponsored by Federal, state county and municipal plans, none of which are covered by ERISA. The rules are not the same. Do you live in a state that deals with "marital property" or a state that deals with "community property" or in Louisiana. Did the agreement or the decree of divorce use the term "marital share", and if so did it define how that "marital share" was to be computed? You have not stated whether or not the plan is a defined contribution plan (like a 401(k)), or a defined benefit plan where you retire after a certain number of years of service with a certain income history and are eligible for a lifetime annuity and your former spouse may be entitled to a survivor annuity. I am guessing that your plan is a 401(k) plan (a defined contribution plan) but there is no way to advise you without seeing the exact terms of what was supposed to be in the QDRO. Does it state a "Valuation Date"? Does it adjust the amount payable to your former spouse for gains, losses and investment experience? If it does not reflect such an adjustment does the law of your state take the position that adjustment for gains, losses and investment experience are implicit even if not addressed? Will it even be possible for the Plan Administrators to may such an adjustment, or will records no longer be available or has the plan changed Third Party Administrators (TPA) who cannot or will not go back prior to the date that they became TPAs? If your plan is a 401(k) and you have retired, Federal law permits you to take out the full amount in your account without notice to, or consent by, your former spouse -- unless the plan provides otherwise -- or unless the plan has actual notice of your agreement or the judgment of divorce and have been told by their attorney will sit on the money until the parties reach an agreement or the court tells them what to do. If your plan is a 401(k), it may decide to wash its hands of people who take 14 years to protect their rights and file an interpleader and deposit the money in the Registry of the Court. In a defined contribution plan like the 401(k), it will be important to know how outstanding loans will be addressed and whether or not you have made hardship distributions and how much of your account is "vested" and whether you have a Traditional and/or a Roth component of your account. Does your 401(k) plan permit an immediate lump sum rollover or distribution to your former spouse, or is she required to wait until you retire? Do you live in a state where the 14-year delay has resulted in the court losing jurisdiction to enter a QDRO pursuant to a state statute of limitations, or the concept of laches, or because the period to ask for the QDRO expired per the Rules of Procedure, or some other reason? If your plan is a pension plan and you remarry and then retire (in that order), your former spouse will lose all rights to a survivor annuity benefit no matter what was the agreement of the parties or what was in the divorce decree or what is set forth in the QDRO. In some states if the agreement or the parties or the judgment of divorce does not explicitly mention survivor annuity benefits, the former spouse will not get them....period. Is your plan sponsored by a church or religious organization or a labor union? They tend to have strange rules. It is important to know the exact name of the plan? Don't tell me, for example, "Lockheed", since that company has 49 different pension and retirement plans. If you wife was represented by an attorney, the attorney should be sued for malpractice and report to the State Grievance Commission for incompetence. It may be too late for that (statute of limitations) but more and more states are adopting the "discovery rule." So DP66, you are not going to receive any useful information here, and you may some wrong information, even from me. If you want a correct answer you need to ask the right questions and you haven't done that. If you want to cross out all of the personal information in the agreement or in the divorce decree except for the name of the e Plan, and submit it to this message board, I will take a look at it and give you my thoughts. DSG

Please read. https://www.planadviser.com/fidelity-goes-national-401k-income-annuity-offering/?utm_source=newsletter&utm_medium=email&utm_campaign=PAdash The law as it stands today is that a Participant in an ERISA qualified defined contribution Plan can take a distribution from the Plan without giving notice to or obtaining the consent of his/her spouse or former spouse. But the time when such a distribution can be made has always been defined as the time the Participant terminates employment with the Plan Sponsor (e.g. retires or is fired). I have always stressed to my colleagues at the Bar the importance of getting the QDRO entered by the Court at the same time that the JAD is entered and sending a certified copy to the Plan Administrator ASAP. I have always suggested that the moment they know that there is a pension or retirement benefit that will be addressed by the parties in an MSA or by the Court at trial, send every Plan Administrator (defined contribution or defined benefit) a Notice of Adverse Claim/Interest - see attached template and cover letter. Send a copy of the Complaint and a copy of draft QDROs. Plan Administrators are not required to take any action, but their lawyers usually suggest that, now that they have "actual notice", they don't want to find themselves involved in a lawsuit and should freeze everything in place until the parties have reached an agreement or the Court has entered a QDRO, vel non. Now Fidelity has a new product - Fidelity’s Guaranteed Income Direct, now available to Plan Sponsors nationally and applicable to 401(k), 403(b) and 457(b) Plans. Participants can purchase an income annuity directly through an employer’s plan benefit from a third-party insurer selected by the employer. The assets Participant's assets leave the retirement plan and go to the insurer for purchase, with monthly cash flow views available through the benefits platform, NetBenefits. The article doesn't mention the Secure 2.0 act that became effective on January 1, 2023, but it is consistent with what I have read. So let's say that the Participant retires and elects the new annuity option offered by Fidelity. The parties are still happily married. No divorce is on the horizon. But matters deteriorate and somebody files suit for divorce. Are the prospective Alternate Payee and the Court bound by the annuity option selected by the Participant? Can a QDRO supersede the annuity election and enter a QDRO awarding an immediately payable lump sum? Will that sponsor of the annuity, e.g. MetLife, Pacific Life, Prudential Financial and Western & Southern Financial Group, be required to accept and act in accordance with a QDRO? What if the Participant elects a 10 year life only annuity and dies 2 years later. Are the balance of the annuity payments wiped out thereby destroying what should have been the Alternate Payee's interest in the Plan benefits? Will the annuity contain the equivalent of survivor annuity benefits options and be treated like a QJSA in a defined benefit plan? I don't know the answers to any of these questions. But I can say with confidence that whoever drafted and enacted Secure 2.0 had zero experience in family law or in the allocation of defined contribution plans. Maybe some answers can be found at: - https://www.fidelity.com/annuities/overview?imm_pid=700000001009713&immid=100732_SEA&imm_eid=ep78286740705&utm_source=GOOGLE&utm_medium=paid_search&utm_account_id=700000001009713&utm_campaign=FLIA&utm_content=58700008578251620&utm_term=guaranteed+income+plan&utm_campaign_id=100732&utm_id=71700000115292309&gad_source=1&gclid=Cj0KCQiAqsitBhDlARIsAGMR1Rh1PyZfQVskEw0lmOAxtS99Cr3vuwZ2vfGwuQ5eP6C5UtR8aKQcnHAaAnUsEALw_wcB&gclsrc=aw.ds David Notice of Adverse Claim-Interest.pdf Notice of Adverse Claim- Interest Cover Letter (2).pdf

Jakyasar: The statute defined "real estate agents" and "direct seller". The people who work for a broker in any other capacity are almost certainly employees. That would include the secretarial staff and a marketing manager who is not compensated as set forth in the statute. There are people who work for brokers that handle advertising and marketing materials like VistaPrint Booklets Brochures Business Cards Forms Checks Door Hangers Flyers Gift Card Holders Key Card Holders Magnets Table Tents Packaging Insert Cards Custom Postcards Presentation Folders Whose job is it to make decisions about the employment status of someone like this? A Plan Sponsor is at risk if he/she makes the wrong choice. "Employees" get 7.65% employer contributions to FICA and Medicare, the same health insurance and pension benefits as the other "employees", Worker's Comp coverage, sick leave and annual leave and all of the other fringe benefits. Independent contractors get none of them. Realtors tell you that the R in their logo stands for "Republican". That that may provide understanding of how section3508 came to be enacted during the Presidency or Ronald Reagan.

Here is my legal opinion and my opinion as a real estate broker since 1974: Real estate agents are classified as independent contractors by Federal law. See 26 USC 3508 at https://www.law.cornell.edu/uscode/text/26/3508 and see https://www.nar.realtor/advocacy/nar-issue-brief-real-estate-professionals-classification-as-independent-contractors I see no evidence that this code provision was changed by the new DoL FLS Rule that you can find at https://www.federalregister.gov/documents/2024/01/10/2024-00067/employee-or-independent-contractor-classification-under-the-fair-labor-standards-act

Your local court system will usually pay a very paltry fee to a juror, sometimes as little as $15 an day. Payments by an employer for the time that an employee is on jury duty is not extra compensation, it's just compensation for time that an employee would otherwise be at work but is not. Compensation is what shows up on the final W-2 at the end of the year. If an employee has a salary of $50,000 a year and 4 days of his time during the year is spent on jury duty, his salary is still $50,000 a year. Like annual leave or sick leave or compassionately leave etc. I Don't understand how a plan can exclude that sort of fringe benefit.

Are you suggesting that in a defined contribution plan you can structure the plan to permit rollovers to an IRA or other eligible retirement account while the Participant is still in the employ of the Plan Sponsor? I assume you are not talking about loans or hardship distributions. David

26 USC 414(p)(2) provides: “(2) Order must clearly specify certain facts - A domestic relations order meets the requirements of this paragraph only if such order clearly specifies— “(A) the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order, “(B) the amount or percentage of the participant’s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined, “(C) the number of payments or period to which such order applies, and “(D) each plan to which such order applies." That is all you need to have in a QDRO for it to be acceptable to the Plan Administrator. See Festini-Steele v. Exxonmobil Corporation, No. 20-1052, __F.App'x__, 2021 WL 629755 (10th Cir. Feb. 18, 2021) that you can find at - https://scholar.google.com/scholar_case?case=9213427610449703594&q=Festini-Steele+v.+Exxonmobil+Corporation&hl=en&as_sdt=20000003 The Plan Administrator may want more information, and I always give it to them, but technically it's not required. But that does not seem to be your problem. You obviously have a defined contribution plan and need to change the name of the Plan and the Plan Administrators, but the need to adjust for gains and losses is the problem. I have had many cases where the entry of a QDRO was delayed for many year, often 10 or 20 years or more and during that time the Plan Administrator changed. When I asked for their QDRO package pursuant to ERISA Section 206(d)(3)(G)(ii), they advised me that the Valuation Date from which gains, losses and investment experience were to be computed could not be prior to the date the new Plan Administrator took over. The explained quite logically that they did not have the information to make those calculations. Keep in mind that I was not usually talking to the actual Plan Administrator, an employee of the Plan Sponsor, but to a Third Party Administrator (TPA) like Fidelity or MassMutual or Voya or Vanguard or WTW. What do do? I could just use the date the new TPA took over and leave it at that. If the market value of the assets in the Plan had decreased, that would be best for the Alternate Payee. I don't know that I had any other option in dealing with the new TPA. I could tell the client to sue his former attorney (assuming he had one) for malpractice and report him to the State Grievance Commission for a violation of the Rules of Professional Conduct (competence). Failure to process a QDRO is a timely manner will get you sued every time. The problem will be how to compute the damages, that is, the gains, losses and investment experience from the Valuation Date set forth in the original Marital Settlement Agreement (MSA) or, in the absence of the MSA, in the Judgment of Absolute Divorce (JAD), to the new TPA take over date. One method is to take the value of the account as of the original Valuation date and use an average of the Dow Jones, NASDAQ, S&P 500 and Moody’s bond rate each month year to bring that amount up to the date of the new TPA take over. Then the gains and losses would be computed from that date to the date of rollover or distribution to the Alternate Payee. There is authority for that approach in Maryland in the case of Reynolds v. Reynolds, 216 Md. App. 205, 85 A. 3d 350 (2014) where the appellate court held that: "We agree that a trial court could, in principle, attribute a reasonable rate of return to assets, and that the rate on U.S. Treasuries would be a conservative estimate of returns for nearly any asset." The Treasury rate tends to be a little low, but I have have used a financial analyst at UBS to make such a computation. Not perfect, but it wasn't much money and it saved litigation costs. See attached. If you are negotiating with the malpractice carrier for the negligent attorney you will find that they will settle rather that run the risk of a nisi prius (lower court) or appellate judgment. DSG 01-19-2024 Smith Case Growth Computation..pdf

Dianna912: There are about 40,000 defined benefit plans (pensions) in the US. Most are covered by ERISA. They do not all work the same was. Every plan has a Plan Document setting forth what they can and cannot do. They must comply with ERISA. State laws governing the allocation of pension benefits are not uniform and a state court cannot order the Plan Administrator to do anything that is not permitted by ERISA or by the Plan Document. Federal law preempts State law. People sign Marital Settlement Agreements ("MSA") and agree on various allocations of benefits. In the absence of an MSA the Court will issue a Judgment of Absolute Divorce ("JAD") and allocate the pension normally based on what the Judge deems to be equitable. In order to provide you with a valid and intelligent response to your questions, a competent attorney who specialized in QDRO matters need to know/see: 1. The exact name of the Plan. You cannot simply say "Lockheed Martin" since that company has dozens of pension plans for different classes of employees and for many companies that it has acquired or with which it has merges over the last decades. 2. A copy of the MSA if any. 3. A copy the JAD. 4. A copy of the QDRO. 5. All correspondence with the Plan Administrator. Unfortunately you may have misstated the identity of the parties. If in fact is was a separate interest allocation, then the Participant (who you said died some years ago) would have the right to name a new spouse to receive a survivor annuity benefit with respect to that portion of his retirement annuity that was not transferred to the Alternate Payee as the Alternate Payee's separate interest. But in most separate interest allocations the Plan documents do not permit the Alternate Payee to name a survivor annuity benefit for a new spouse when she dies. The normal language you will see in the QDRO will say something like this with respect to the Alternate Payee's receipt of her separate interest in the Participant's retirement annuity: "The Alternate Payee may elect to receive his or her vested benefit in any optional form permitted for Alternate Payees by the Plan in effect at the Alternate Payee’s commencement except that the Alternate Payee may not elect to receive: (i) a level income annuity option or, (ii) a qualified joint and survivor annuity with a subsequent spouse." A separate interest allocation severs the relationship between the parties. The Alternate Payee can start to draw his/her separate interest even if the Participant had not retired, subject however to what we cal the age 50 rule, that is, the Participant must be over age 50 and be eligible to retire and that normally takes place at age 55. So the bottom line is that the Alternate Payee in your case is not entitled to any survivor benefits that are payable as a result of the Participant's death unless the Participant named the Alternate Payee to receive them. However many property drafted QDRO will negate that possibility by expressly saying that any previous elect of the Alternate Payee (the former spouse) is void. It often happens that people forget to change beneficiaries of their retirement plans and life insurance and that can lead to expensive litigation. DSG 01-18-24

Jack Stevenson: Does the JAD specify the percentage survivor annuity amount? It can be from $1.00 a month to a maximum of 50% of the amount of your self only annuity. If it is not addressed CFR default at OPM is the maximum amount. Does the JAD specify who pays for the cost of the survivor annuity? In not, then the CFR default at OPM is that YOU, the employee, pay the full amount. So if your retirement annuity is $6187/month, the maximum survivor annuity is $3,094/month, the cost of the survivor annuity will be $619/month and will be taken from YOUR share of the retirement annuity. On top of everything else, if the JAD did not reserve jurisdiction for the court to enter the QDRO, it may not be able to do so at all. DSG

The language of the QDRO will reflect the agreement of the parties if there is one, or if not, the language of the court in the judgment of absolute divorce. So you are not talking about a matter of law. You are talking about a matter of what was agreed to by the parties or mandated by the trial judge. Aside from that, the survivor annuity benefit, which is what you were really talking about, is usually less than the amount of the retirement benefit. Most plans mandate what is known as a 50% joint and survivor benefit, but some plans permit the parties to agree, or the court to award, anywhere from 33% to 50% to 66% to 75% to 100% of the full amount of the retirement annuity. What this means is that in most cases the amount payable to the former spouse will be necessarily less than the full amount of the retirement annuity and will more closely approximate the amount she was likely receiving as her marital share during the joint lives of the parties. If you multiply 50% by the coverture fraction, it may reduce it by another 50%. On I'm not aware of any law, rule or regulation that requires the parties to actually sign off on a QDRO. Most jurisdictions treat a QDRO as an enforcement tool, like a garnishment or an attachment. We normally put approvals on the QDRO not because it's required but as a matter of courtesy to the other counsel. The Department of Labor has a pamphlet that specifically says that signatures by the parties are not required. Would anyone seriously expect a judgment debtor to be asked to sign a document that attaches his assets or garnishes his pay? Of course not. File a motion for entry of the QDRO I've done so on many times and the judge has never refused to do so. If you have any questions feel free to call me at 301-947-0500. David

https://www.thetaxadviser.com/issues/2021/may/tax-issues-noncompete-agreements.html

If the divorce decree was entered in Maryland, as Mr. Stevenson has said in his previous posts, the answer is that his ex-wife will be entitled to 50% of the marital share of his retirement annuity, but not his survivor annuity benefits. In Maryland there is a case, Potts v. Potts, decided in 2002 that is very clear and it's holding that if you do not mention specifically survivor annuity benefits in the agreement of the parties, or in the judgment of absolute divorce, the former spouse/alternate pay does not receive them. If ex-wife is planning to submit a QDRO to the court at this late date, you have to make sure that she does not include survivor annuity benefits. THE QUOTED LANGUAGE NOT ONLY DOES NOT REFER TO SURVIVOR ANNUITY BENEFITS, EVEN IF IT DID, IT DOES NOT REFER TO THE PERCENTAGE OF SURVIVOR ANNUITY BENEFITS TO WHICH SHE WOULD BE ENTITLED OR WHICH PARTY WOULD PAY THE COST OF SUCH BENEFITS OR WOULD SUCH COST BE ALLOCATED BETWEEN THEM. SINCE MR STEVENSON SUGGESTS THAT HIS DIVORCE DATES BACK PRIOR TO 2002 THERE WILL BE A QUESTION OF WHETHER OR NOT THE POTTS CASE IS RETROACTIVE TO HIS CASE OR NOT. If Mr Stevenson is serious about protecting his rights he needs to hire an attorney right now. He is not going to find all of the the answers he needs on this blog or be able to represent himself with the little knowledge he has about these matters. DSG

Your lawyer is wrong. Read my email of last Friday.

First of all, I don't know what you mean by saying "during the ask". And I don't understand the timeline you were talking about, when the court did what or said what and when your ex-wife is making a demand. If you actually want me to take a look at this, I need to see a copy of the agreement and the judgment absolute divorce and that will tell me pretty much everything I need to know. It generally doesn't matter where you earned the 401k or any other pension or retirement plan. It only matters in what state the divorce was granted and how the allocation of pension and retirement benefits are treated in that state. If the If the agreement or the judgment of divorce did not mention the 401k and more than 30 days have elapsed since the entry of the judgment of absolute divorce, your ex-wife is likely SOL. David. 301-947-0500 I have been a member of the Maryland Bar for 56 years during which I have spent 37 years preparing qualified domestic relations orders, teaching matters pertaining to pension and retirement plans and testifying as an expert witness on these issues.