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QDRO after participant retires?


Guest HarveyC

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Guest HarveyC

After a participant retires with, say, a JS50% pension and had a marriage breakdown years later, do QDROs have any applicability? In other words, is this no longer the plan's problem if divorce occurs after pension commencement and the concept of QDRO doesn't come into play? I presume the JS50% option applies to the spouse at time of retirement so that upon the participant's death the now former spouse will be entitled to the usual benefits under the JS50% option.

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Could apply.

I had an example where a retiree was receiving $100 per mo., with a $50 survivor payment to spouse. QDRO divided the $100 to pay $50 to retiree while alive and $50 to ex-spouse while retiree alive. Then upon the retiree death, the $100 stops, but the $50 surviving spouse benefit begins.

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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A domestic relations order may divide a benefit that is in pay status unless the payments are made under an annuity that has been distributed from the plan. If the plan is making the payments, the plan should decide how it will allow the benefit to be divided and put the rules in the QDRO procedures. The example that pax gave is a typical and recommended approach -- the benefit payments are split in some fashion but the form of benefit is not affected. In other words, all the payments will be made according to the original schedule as though no divorce occured. The order will determine who gets what part of each scheduled payment.

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Guest Kevin A. Wiggins

Under Hopkins, once the participant has retired the current spouse is vested in the 50% survivor annuity. Because the current spouse is not a participant, and because the QDRO can assign benefits only with respect to a participant, a post-retirement QDRO will not be able to assign any of the 50% survivor annuity to the ex-spuose. In addition, QDROs can't allow the alternate payee to elect an option not available under the plan. Here, the only option available is the one in pay status - the 50% JSA. Accordingly, the only option available to the alternate payee is to split the reduced life annuity payable for the life of the retiree (if, as noted earlier, the plan is paying the annuity).

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