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Participant and Ex-Spouse Remarry After QDRO - What to do??


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This is a first for me. Participant and Spouse divorce. Plan receives QDRO and begins making payments to Spouse (now Former Spouse) pursuant to QDRO. Participant and Former Spouse remarry, thus, Former Spouse is now spouse. What should the Plan do? Does it stop making payments because there is no longer a former spouse; Does it continue to make payments, because, the QDRO is a court order, until such time that the order is modified...Any other ideas?

Thanks.

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Does the QDRO say anything about stopping payments if the participants remarry? If not, then the plan administrator probably has no authority to make a change. Not usually a good idea to impute yourself into the judge's chair.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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I dont think there is any correct answer- just choices. One choice is for the parties to go back to the court and request a modification of the QDRO now that they have remarried. I dont think they will do so because it costs money. (Also I have never herad of a QDRO being unwound once payments start.) The Second choice is for the plan admin. to continue payment to the spouse based on the QDRO and recognize the spouse as beneficiary for the remaining spousal benefits payable under the plan. Presumably the total of the two segments will equal 100% of the survivor's benefit under the plan.

mjb

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Thanks for your responses - I agree that there is no right answer, although I will try to call the DOL to get their input. I would never have the Plan try to be the judge - not appropriate at all. The parties want us to stop the payments but I do not want to spend the money on going to court to modify the QDRO. That is something that the parties should pay for and do. Any other thoughts and suggestions are welcome.

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It might be helpful to know more abbut the plan's distribution provisions and the QDRO's distribution provisions. Was a lump sum a possible choice, but the AP elected installments? Or did annuity payments start under the QDRO? What would happen to a participant that started benefits but was rehired? None of these questions will lead to a definitive answer, but they might help with interpretations and the choices. One thought: If annuity payments started under the QDRO, I would be very reluctant to stop them. Subsequent events almost never justify modification of an annuity benefit.

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Good advice from mbozek and QDROphile.

But, how about opting for simplicity? If the QDRO does not address this situation, then the plan does nothing (that is, continues payments per the order). If the parties want to stop payments, then let them pay to have the court change it. In the meantime, the plan and sponsor stay out of it, incurring zero additional expenses.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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As long as the plan administrator does not suspect fraud, I agree that the plan administrator does not have to take action and the inidviduals need to arrange for the changes they want via an amendment to the QDRO. But even if the parties go back to court and amend the order, I would be reluctant to modify an annuity distribution that had started properly under a legitimate QDRO.

A subsequent order cannot change the distribution because an order is not a QDRO if it provides for a type or form of benefit or any option not otherwise available under the plan. I have not seen any plans that allow modification of an annuity once the payments have begun, except suspension upon rehire. A new or amended order could not modify the annuity payments because the modification would not otherwise be available under the plan. And I would not give any credence to "nunc pro tunc."

I don't think the plan administrator should choose to qualify the order to modify the annuity. Once the plan allows modification, trouble lies ahead in other circumstances. Also, it may be that permissive modification would cause the plan to be operated contrary to its terms.

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Not being an attorney or versed in Latin, I had to look up "nunc pro tunc". Google search found this:

Nunc pro tunc literally means "now for then."

This phrase is used to express that a thing is done at one time which ought to have been performed at another. Leave of court must be obtained to do things nunc pro tunc, and this is granted to answer the purposes of justice, but never to do injustice. A judgment nunc pro tunc can be entered only when the delay has arisen from the act of the court.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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Now that pax has explained what "nunc pro tunc" means, I had to go back and edit my message to make the statement negative! Actually, I slipped and omitted the "not" in the post.

In short, an order that is issued "nunc pro tunc" has a retroactive effective date. What I was getting at was that I think it would be improper to go back to court to have the original order modified to stop annuity payments on the theory that the modification was not a new (and not qualified) order, but a negation (nunc pro tunc) of the old qualified order, with the same impermissible effect as a new order, but rationalized through legal mumbo jumbo. Hmmm, I wonder what Google would tell us about mumbo jumbo. Sorry about that long sentence and all the commas.

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Well, it is not surprising that www.mumbojumbo.com is a real website.

However, isn't it the lawyer's credo? Oh, wait, I'm an actuary; it's my credo!

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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