QDRO - is this a form of benefit not provided by the plan?

[Guest amfam2]

Received an executed QDRO for a defined benefit plan. QDRO is a mess - language used throughout QDRO applies to dc plans rather than db plans. However, included in this QDRO is a new trick I've not seen before. Paragraph states " if the Alternate Payee does not receive his retirement benefits in full as and when provided for herein, Participant is ordered and directed to make payments out of her assets equal in all respects to award of assets which were to be paid to Alt Payee herein."

In your opinion, would you construe this is as the QDRO is providing a type or form of benefit, or any option, which is not otherwise provided to participants with respect to the plan?

(Plan intends to reject QDRO for various reasons, just wondering how to address above paragraph in list of reasons we're rejecting....)

[jpod]

No.

Why do you think this language imposes the type of burden on the plan which the statutory language was designed to avoid?

[Guest amfam2]

Actually, I wasn't looking at the regulation from the viewpoint of an administrative burden - I was looking at the regulation from a benefits, rights & features standpoint. Which is to say that the QDRO cannot create a benefit, right or feature which is not available to the other participants.

Thus, in a defined benefit plan the QDRO paragraph could be construed as adding a "right" or a "feature" which no other plan participant has... namely, the "right" or "feature" which guarantees a pension beyond that of the plan's obligation (as well as that of the PBGC); a guarantee which no other participant has....

As I type this, I'm not fully confident in my interpretation. I wonder if I'm stretching the benefits, rights & features regulations to apply in this case and perhaps this interpretation is incorrect.....

[QDROphile]

The language has nothing to do with the plan and therefore has nothing to do with the qualification of the order.

A domestic relations order can cover any number of things. The language talks about what one person pays another. It does not require the plan to do anything. The plan only looks at the portion of an order that applies to the plan. Within that portion, the plan determines if the order is qualified.

[mwyatt]

Actually, looking at the language in question, this has nothing whatsoever to do with the Plan itself. It is merely adding a "stick" (i.e., if payment of the benefits to the ex is not made, the participant, NOT THE PLAN, has to make the ex whole). Haven't seen that phrase before in a QDRO, but as this doesn't affect the plan (nor does it add a BFR in the plan itself, as the sanction is from the individual's assets, not the plan), I don't see it as an issue. Some smart attorney thought that this would be impressive language to add to prompt the participant to ensure that the payment is followed through.