QDRO - post retirement

[Guest jgroves]

Situation: Retiree recieving Straight Life Benefit owes his ex (who he was married to when he retired) $200/month as per property settlement agreement. However, it was NOT specified that it come out of the Retirement Plan. He's been paying the $200, but late. X spouse's lawyer said that she could get a QDRO in order to become an alternate payee and have the $200 sent directly to her from his retirement. She said that the retiree (husband) will never agree to this.

Q1. Does the retiree have to sign off on the QDRO - I think the answer is no.

Q2. Isn't she better off going to the court and having the court slap the guys wrist for not paying on a timely manner? Surely this would be easier than a QDRO - or maybe not.

Q3. Can I get an asprin...my head hurts!

Jim

[jpod]

1. Whether the employee has to sign off on the QDRO is a matter of state domestic relations and civil procedure law (although the answer is probably "no").

2. The good news is that a QDRO would give her confidence of receiving the money each month. The bad news is that she would be taxed on the $200, whereas the $200 per month under the property settlement may be tax-free to her (assuming it is truly property settlement and not alimony).

3. Take 2 and call us in the morning.

[QDROphile]

The most important question is the one you did not ask --"Should I be advising (or even discussing with) the former spouse what to do or what her rights are?" If you are a plan fiduciary or involved in running the plan or a representative of the former employer, can you guess the answer?

[Guest jgroves]

Not a problem, did not advise. As the administrator, don't I have to at least talk with her about the QDRO rules and give her the information (procedures for QDRO under our plan) she needs to process a QDRO. Are you saying that I can NOT do this?

[Kirk Maldonado]

In addition to QDROphile's concerns, you might want to consider whether advising people on their rights constitutes the unauthorized practice of law.

[QDROphile]

The well advised plan administrator responds to questions concerning possible distributions to persons who are not participants or beneficiaries (whose rights have ripened) as follows: "We can send you the plan's written procedures on qualified domestic relations orders (for free) and the plan's summary plan description (for which we may charge you)." Sometimes you don't make available the SPD unless they can tell a legitimate story (such as they are a former spouse). The well advised plan administrator has good written QDRO Procedures (somewhat rare). The QDRO Procedures should not provide for any correspondence, except review of draft orders, provisions describing availability of information about a participant's benefits, notices as required by law, and review of the plan administrator's interpretation and determination of qualification of the order.

Resist the urge to help. You will be punished for helping.

[mbozek]

Before anyone even considers the application of a QDRO are we sure that ERISA applies. Second if the a matter was subject to a divorce decree which did not provide for a QDRO it is necessary to review the decree to determine if the court retained jurisdiction to revise the decree and property settlement. Courts are very reluctant to open closed divorce matters after the property has been divided without a QDRO. The property settlement should considered an election of remedies by the spouse and she cant come back now and say that she wants the QDRO if the retiree is not in default of his monthly payment (Besides why would she want to spend the money on an attorney to have a court issue a QDRO if he is not in default---There is something wrong with this picture. $200 a month is not enoughto pay for legal fees.

Third: J why are you even involved in this mess if you are not counsel for the retiree or plan?

[Guest jgroves]

I get all the retirement calls. I just got her information and sent her the Rules and Procedures for a QDRO under our plan. Seems like I've been getting one a week for the past few weeks after not getting any for a year. Anyhow, I also told her that if a QDRO is written up to send in the draft and I forward it to plan attorney for final approval. I definately don't offer advice since I don't even play an attorney on TV. As to why she's doing it for a measly $200, I think she is just PO'd about not getting her money and the guy is sending her a "love" letter with it each time. Hey, didn't ask, she just told me the whole story. I'm like a bartender! Anyhow, thanks for the great advice QDROphile and the rest of you. Definately helped and gave me a better understanding of my role in these situations.

[mbozek]

She must have a very cheap lawyer who will write a QDRO to insure a $200 a month payment. Maybe you should supply her lawyer with a model qdro.

[david rigby]

This might be a starting point. And why not give the link to the spouse.

http://www.dol.gov/dol/pwba/public/pubs/qdro.htm