2 Items... Valuation Date Issue and Plan Admin Lost record of QDRO HELP!

[Guest flhockeynut]

Sorry for the long post, but we do not want to approach legal unless absolutely necessary. I am recently married to a divorcee. Her previous husband of more than 20 years agreed to QDROs for his Bell Atlantic Savings Plan, ESOP and Pension Plan. The basis is a 50% award as of the date of filing for divorce (9/92).

My wife's attorney was a real jack-ass. From the final Judgment of Divorce in 1995, he chose to compose the QDROs instead of using the sample documents made available to him from Bell Atlantic ($$$$$ FEES). He was able to qualify the ESOP in 1996, but continually failed on the Savings Plan and the Pension Plan. At some point, he effectively stopped trying to prepare documents that would be the plan requirements. Further, he died about a year ago.

My wife is not an assertive person, nor has she any kind of understanding or knowledge in this complex area. About two months ago, she brought this to my attention and I have been working on this project with some degree of success and also have run into some problems. Hopefully, your comments and advice will prove to be helpful.

1. Her ex-husband has been and continues to take an adverserial approach to anything she does. In fact, he has all but disowned his three sons by their marriage. He has remarried with one daughter who was born before the divorce was filed.

2. I am not certain of the date, but Bell Atlantic merged and is now part of Verizon.

3. My wife did not elect to take her distribution from the ESOP after it was filed and qualified, although she does have written communication from the Bell Atlantic QDRO Unit.

4. Apparently, when Bell Atlantic merged, their own QDRO Unit was disbanded and Hewitt Associates is now the TPA.

5. Verizon Employee Benefits has no record of the Qualified Order on the ESOP! My wife does have written communication from Bell Atlantic describing the valuation, which was made available to her after the Order was qualifed. My understanding is that once the Order is qualifed, a seperate account is created for the benefit of the alternate payee.

6. I recently received written approval from Hewitt regarding the QDRO for the Pension Plan and will be getting the Order signed and sealed by the court within a few days.

7. The Order submitted for the Savings Plan was denied after review. The only reason for the denial was that they cannot permit under the existing plan a valuation date prior to January 1999. I am "assuming" that there was a change from the "Savings Plan" with Bell Atlantic upon the merger to Verizon and the plan is no longer is effect. Hewitt will approve the Order with a change to the new valuation date, but the participant will not approve and with a reasonable basis.

8. I spoke to DOL (EBSA). They directed me to communicate with the Plan Sponsor (Verizon) to determine what happened to the ESOP qualified order and how to deal with the valuation and distribution of the Savings Plan.

9. Hewitt denies having anything to do with the adminstration of the ESOP, but is making some kind of attempt to help via their contacts at Verizon.

10. You should know that the participant has retained counsel after copies of the proposed QDROs were presented to the court for seal and signature. However, in his attorney's letter to the court, he did specifically say that we would have no objection to any order that was approved by Hewitt.

11. I have found it virtually impossible to find a telephone number that a non-Verizon employee can use to reach Employee Benefits.

12. An finally, please... no lectures on my wife's not keeping track on this issue. She had to deal with three boys on her own that presented plenty of problems and issues.

So........

A. Even though there has been a merger/acquisition of Bell Atlantic to Verizon, I would presume that they should still be liable and accountable for failing to have the ESOP of the participant split into seperate accounts. Further, the fact that they seem unable to find ANYTHING regarding this order might suggest that they have failed their fiduciary responsibility in securing the rights of the alternate payee. My understanding under ERISA is that once the Order has been Qualified and accepted, the alternate payee has the same rights and protection as the plan participant.

B. I am pretty much confused as to my approach with the "Savings Plan". If that specific Plan was discontinued, I would hope that all records would be archived and a valuation for 9/1992 would be available. If that is the case and the 50% share is defined, can and how would that value be updated with the length of time involved. If the Plan was "changed" to it's current 401-k status, how should the alternate payee approach this situation.

C. Clearly, recordkeeping is very much an issue. If I should be stonewalled in trying to clear this matter, what remedies are available? Again, trying to speak directly to a Verizon manager in their Employee Benefits department has not yet been possible. Any ideas?

Once again, please excuse the length of this post. My intent was to cover every possible issue with clarity. Thank you in advance for any assistance you can provide.

Tom

[Guest 401der]

If the money has never been segregated from the participant's accounts and no one can find a copy of the Domestic Relations Orders to get them qualified and paid, isn't it time to go back to divorce court to get the participant and alternate payee (your wife) to make a new agreement from which new DROS could be prepared and submitted? Even if the participant (ex-husband) isn't willing to be cooperative on his own, he probably doesn't want to spend any more time in divorce court than is absolutely necessary and may be willing to cooperate and help if faced with that alternative.

[david rigby]

I'm no expert, but you clearly need to have this conversation with a qualified attorney. If the prospective attorney is not intimately familiar with a QDRO, then keep looking.

1. n/a

2. Yes. Bell Atlantic and GTE merge 07/03/2000 to form Verizon.

3. Discuss with attorney.

4. ?

5. Your wife may have a copy, provided by her attorney. If not, see if the records of the (now deceased) attorney may have a copy.

6. Not sure what this means, but it sounds promising. Discuss with attorney.

7. Compromise may be possible, for example if the approximate amount from 1992 is known. However, practicality of dealing with old records will be important.

8. EBSA cannot help, except you should review the QDRO literature on their website.

9. Might be a problem. Don't know if the ESOP still exists. (It could have been merged into another plan.) I have a copy of the SAR's recently sent out by Verizon; no ESOP included.

10. Discuss with attorney.

11. When you/attorney write to them, you can request a phone number, but don't hold your breath.

This address is included in the SAR booklet mentioned above:

Stephanee Wallace

Executive Director - Benefits

Verizon Services Corporation

750 Canyon Drive

Coppell, TX 75019

12. My best to you all.

BTW, there are 4 defined contribution plans and 18 defined benefit plans for which Verizon produced an SAR. You may need to be careful with identifying the correct plan(s) by name.

[QDROphile]

we do not want to approach legal unless absolutely necessary

It is absolutely necessary "to approach legal" if you expect to get any benefits or compensation for incompetent legal work.

[Guest flhockeynut]

Thank you for the replies to this problem. Sounds like you are all in agreement that my wife should retain counsel, which will be somewhat problematic due to our financial situation. What is distressing about the recommendation is that we KNOW that the ESOP Order was filed and signed by the appropriate judge in 1996. We have a copy of it and sent it along to Hewitt. We KNOW that Bell Atlantic, via written correspondance from their then QDRO Unit, that they received and acted on the Order. We even have the value of the account as of the Valuation Date in that letter, which also was copied to Hewitt. Is it or is it not encumbent upon Verizon (formerly Bell Atlantic), based upon their fiduciary responsibilities to reconcile what needs to be done here? They are at fault, not the alternate payee.

I do appreciate the additional information that you have provided. I plan on composing a letter to the head of the Employee Benefits Department to try to get something done on the ESOP and Savings Plan. In the meantime, I am going to speak with the Judge's clerk to personally submit the approval letter and the QDRO for the Pension Plan. I do know that it was for the correct Plan or it would have been rejected. Presumably, based upon the participant's statement that he would not interfere with the completion of an approved QDRO, the court will provide for prompt action on this matter.

Finally, if any other readers have any other suggestions or advice, please do post to the message board. Thank you again!!!

Tom

[david rigby]

Very difficult to determine "fault". You may want to review some of the other postings in this same message board.

In a nutshell, Verizon's job is to administer the plan properly. One small part of that is determining if they will accept a proposed QDRO submitted by you or attorney. Applicable statute is Internal Revenue Code 414(p). Note that Verizon may accept as valid a QDRO that may have small defects that have no bearing on the ability to properly interpret and administer it; but that is still their decision. Likely, they see draft QDRO's every day, so they have well-defined procedures.

[Guest flhockeynut]

Just a brief follow up .... in addition, Happy New Year to all!

It appears that Hewitt has found the ESOP Order and will be working with Verizon to get that handled. That is a relief.

The judge's clerk has advised that we will need a specific letter from the participant indicating "no objection" to the Pension Plan which has been approved, pending the signing and sealing of same from court. A letter went out yesterday to the participant's attorney, copied to the judge, regarding the statement made in the attorneys original letter to the court that his client "had no objection to any order, as long as it was approved by the Plan Administrator". Hopefully, that will speed the process along with the Pension Plan.

The only remaining issue is the ability of Hewitt or Verizon to come up with an actual value of the 401-k Savings Plan back on 9/93. After going through freeerisa.com, I have learned that the plan has been in existance since 1984 by reviewing the most recently filed 5500 for the plan year of 2002. If that is the case, I am dumbfounded as to why they cannot or will not search for a valuation to coincide with the Judgment of Divorce. What is most frustrating is that I CANNOT reach out and speak directly with someone from the company, Verizon Communications, Inc., even though the 5500 shows them as the Plan Administrator. I keep getting directed to Fidelity Investment Management who has been unable to provide any assistance whatsoever.

Once again, thanks for any other assistance that might be available and for allowing me to vent a bit on this board.

[Guest b2kates]

it is likely that Hewitt was not the TPA at 9/93 and they may not have the information stored in their system. That does not mean that the Plan Administrator is not required to determine the amount.

Good luck

[Guest flhockeynut]

Thanks Brett for the feedback. Indeed, Hewitt took over in 2001. So, the million dollar question is who was TPA from 2001 back through 1993?

The good news is that after posting here earlier this morning, I was able to obtain from the AP a copy of the Particpant's Financial Discovery Statement required for all divorces in the State of New Jersey. The 401-k Savings Plan balance is listed, so there is at least a starting point. Since the Participant has been totally problematic from the divorce through today, I don't expect much cooperation. However, a letter to his attorney will be sent off today requesting annual statements for this Plan in an effort to bring this matter to a fair and equitable solution. If not, there is always the fall back to the position Hewitt takes on the DRO that the valuation date cannot go back any further than January 1999. Depending upon the activity with this account, it could be a fair basis for dividing the account. However, I just don't believe the Participant will agree.

With this thought in mind, I have perused some of the threads in this Topic Area. Am I correct in thinking that the TPA can provide details regarding the existing plan that a DRO is pending for to the AP? If so, that would help. If not, what about taking the 50% portion as of the correct Valuation Date and applying a compounded rate of return based upon a reasonable index, such as the S & P 500 and recommending that to the Participant's attorney. One way or another, he knows that the AP is due her share.

Thanks again for all feedback!

[Guest Kevin Wiggins]

Just briefly,

1. ERISA only requires plans, generally, to keep records for 6 years. That doesn't mean, however, that after 6 years they can throw everything away. For example, they can't throw away an unpaid QDRO just because they have had it for six years. It does mean though that they generally don't need to keep valuations for six years. When it comes to QDROs, how long they must keep valuations is an unanswered question.

2. I don't know if it will help, but you may want to get the entire divorce file from the state court. Unless sealed, the file is probably a public record, and there may be something in there that will help. If my client plans come to me and say they've can't find or inadvertently destroyed a QDRO, I always suggest, among other things, going to state court to get a copy.

3. If you get counsel, get someone who is good in both ERISA and family law in your state (or the relevant state where the divorce was entered).

[Guest flhockeynut]

Well...... the three ring circus continues only adding to my confusion with Hewitt and anger with the Participant and his attorney.

I have yet to have any direct communication with the P's counsel. As mentioned above, the only communication in this matter at all was the attorney writing the court that his client would consent to any orders approved by the Plan Admin and that he simply wanted to take some time to review the DROs. Two letters have been sent since the beginning of January, copied to the court, requesting consent on the approved order. Further, since no communication has occured since the one and only letter, I made the "connection" that there doesn't appear to be any basis or compelling reason for delay. Today, I am drafting a letter reiterating all previous points and threatening to file a motion to enforce litigant's rights. The bottom line... the P is a jackass, stalling for the sake of stalling and the attorney, what can I say.

Now on to Hewitt... I called them late last week wondering if they had any new information on the ESOP Order and if there could be some other way of valuing the 401-k Savings Plan. I didn't get much headway with the 401-k, but how about this...... They now want a NEW DRO for the ESOP!!!! No specific reason was to be given on the phone other than that a full package was being prepared and should be arriving here soon. This is after I sent them a copy of the QDRO that was in the court file, a letter from the then TPA, Bell Atlantic QDRO Unit, providing the exact amount for the APs portion of Valuation and corroborating statements showing the amount of shares and market value for 9/93 which matched the QDRO Unit Valuation!

After having read the kind and helpful comments made on this board, I now get this knuckleball... The whole process is very time consuming and creating some serious frustration for my wife and I.

If anyone has more or new comments, please do. Thanks again for those that have taken the time to follow this ordeal and to provide comments and/or advice!