Bittermelon

Thanks for the replies. Yes, I realize that "separate interest" is a bit of a legal fiction or a metaphor used for characterizing an assignment that behaves in a certain way, but it is not a creation of the law itself. Honestly I wish that the statutes relating to QDROs had a bit more specificity about what is allowed, or that there were regulations with better examples. I am having some confusion or whether a "separate interest" benefit survives if the participant dies before either party commences benefits. I thought that one of the favorable features of a separate interest vs. a shared payment is that it would persist afterward irrespective of the participant. Is that not the case? I know it's a slightly different context but I'm reading the PBGC's manual on how it administers QDROs, and under Section 10, "Surviving Spouse Rights of Alternate Payee," it states: "When PBGC administers a separate interest order, it uses a totally severed approach. The participant's benefit is divided into two separate parts - one for the participant and one fo rthe alternate payee. Once the order is qualified, the participant's death before or after the alternate payee's benefits commence will not affect the alternate payee's rights to a lifetime benefits. Thus, assignment of either pre- or post- survivor annuities are not needed to ensure that the alternate payee will receive lifetime benefits." "However some alternate payees and participants may choose to include survivor annuity provisions in their orders." It goes on to basically address my original question and say that "Survivor benefits are in addition to a separate interest or shared payment the alternate payee also has a right to receive." As to calculating the amount of the QPSA, this agrees with what you're saying, QDROphile, that the order can assign any amount of a QPSA. Their model order leaves a blank percentage in the surviving spouse provision, to allow any percentage of the QPSA to be assigned- then, to in a separate interest, the QPSA is (assigned percentage) x (participant's retained separate interest) x (survivor annuity percentage provided for in the Plan). So, with the facts I gave above, the QPSA would be 50% of 50% of 100%, or 25%; but, she will also have her 50% separate interest as well. I think that's the best answer I'm going to get on this.

Thank you. So then, does she retain her 50% separate interest, as well as get 50% of the QPSA? is that right?

Let's say a QDRO creates a 50% separate interest - Participant is not yet retired and has not commenced a benefit, and is presently alive - and the QDRO creates a 50% separate interest in his accrued benefit during the period of marriage, for AP. The QDRO also says that if Participant dies prior to the date the AP commencing her benefit, then the AP must be treated as Qualified Surviving Spouse under the plan, which provides by default for a QPSA equal to what they 100 percent QJSA would have been had the Participant retired the day before he died. So far, pretty standard? But the QDRO goes to state that if QPSA becomes payable to the AP, the extent of her entitlement is "50% of the benefit as set forth in Paragraph 5" which is the paragraph creating the separate interest. The actuary finds this confusing. Is she entitled to a QPSA calculated on 100% of participant's accrued benefit, 50%, or 50% of 50% (25%?) But, looking at 417, I think this QDRO is trying to do something contrary to the plan (and law). A qualified plan must offer a QPSA and a QPSA's payment must not be less than the amount that she would have received had he retired with a QJSA while alive, correct? If the QDRO orders that she's treated as the surviving spouse, and then Participant dies before commencing a benefit, isn't AP's separate interest irrelevant at that point? She's entitled to the QPSA actuarially equivalent to 100% of his accrued benefit, or am I wrong? Because if he had retired before death with a QJSA, that's how much would have been payable as a survivor annuity. But wait, the actuary's saying.. He "lost" 50% of his interest in the QDRO, so even if he'd been alive and retired with the 100 percent QJSA, it would be based only only 50% of what he had accrued prior to the QDRO. So, then is the AP's QPSA based on the 50% interest that Participant had retained after the QDRO but prior to death? Does this make sense? Thank you.