Death of alternate payee with split payment qdro

[Guest mfchristopher]

Is there any problems with payments continuing to the estate of an alternate payee when a QDRO awards the AP a portion of each payment until the participant's death? My concern is that only natural persons can be alternate payees (414(p)(8)). Must payments end on AP's death or may the continue to a designated beneficiary, such as a dependent child? Thanks.

[david rigby]

One hopes that the QDRO already addresses this perhaps with cross reference to the plan document. IMHO, a DRO that does not address this possibility should not be accepted as a QDRO.

[Guest Grabitquick]

I agree with pax, since an order that does not address this would not meet the requirement that a QDRO specify the number of payments or period to which it applies. Also, in the 9th Circuit, the Branco decision (which also involved a "shared payment" QDRO situation) says that an estate cannot get the remaining payments since it does not meet the statutory definition of "alternate payee." Not sure about the other federal circuits.

[QDROphile]

To the extent that the Branco decison says anything that makes sense, I think you have to take it in context and strictly limit it to the facts. The opinion is very difficult to understand and appears not to state or make use of some very important facts. When that happens, it indicates that the judge did not understand. Reading behind the opinion, the question was whether Mr. Branco would get only a partial pension payment, to the gain of the plan, or would the plan have to pay the full pension. Seen that way, the outcome was correct and predictable, but the opinion is obtuse, either in the analysis or the explication. The key to the decision is that the AP died before the AP was entitled to payment. In most DB plans that terminates the AP's interest because of the design of the plan. The opinion took an overly convoluted and probaly incorrect route to that observation. And isn't it ironic to see once again the lengths that a union plan will go to in order to avoid paying benefits to the member!

[Guest mfchristopher]

Thanks all. The QDRO makes clear that if AP must be alive on date payments begin. The DOL guidance states that the QDRO must state a set number of payments OR an event. The event in this case is the participant's death. If payments began to the AP and then she died, could her estate get the remaining payments? I keep going back and forth.

Thanks.

[mbozek]

The QDRO should explain the death contingencies- either payments are forfeited, remaining payments will be made to participant or payments will continue to bene of spouse. There is no legally mandated choice or option to continue benefits. Have you asked the plan administrator?

[Guest Grabitquick]

QDROphile, I'm in absolute lock-step with you on Branco. It's been a thorn in the sides of many of us for several years now. It's tempting to write to Judge Rawlinson and ask her what she was thinking.

Regarding the QDRO referred to in the original post, it's hard to tell for sure without actually seeing it, but the correct result may be (and perhaps should be) that the payments revert to the participant. That may not be so easy to determine, however, if there is an estate or other competing claimants. If the QDRO is indeed completely silent about what happens, then I think that I'd turn it down.