Retroactive QDRO (AP blew 18 month deadline)

[Guest erisamelissa]

Plan notified AP when Participant began receiving benefits that it would withhold 50% for 18-months to give her time to present a QDRO. Letter explicitly stated that if she provided an order after the 18 months expired and the withheld money was distributed to the Participant, all she could get was a prospective interest.

Her attorney has drafted an order that goes retro to the Participant's pension effective date because she "missed" all those payments. I say, "too bad", but a partner in my office says it's fine. Is that right? If so, then what's the point of the 18-months if the participant is going to have to pay anyway?

[QDROphile]

So why should someone offer an explanation to you on this board when you could could ask the partner for an explanation and you don't provide enough information about the situation for anything but a speculative response? I have no trouble imagining how the partner is correct in any number of likely circumstances.

With respect to your question about the 18 month rule, think about it from the perspective of the plan administrator.

[mbozek]

Why not have the partner sign off on his interpretation of 414(p) since he is so sure of his opinion. I am sure that client woud accept his opinion.

[Guest erisamelissa]

And now I see the value of these message boards. Thank you for the thoughtful responses.

[Guest Kevin Wiggins]

You said plan notified AP, but how could the spouse be an AP before the plan received the QDRO in the first place? Was a prior order rejected?

The plan would not have to, and should not, pay twice, if that is what you are asking. If the QDRO provided, the plan could double up on prospective payments until the AP caught up on missed payments and then pay 50/50, or whatever the allocation is in the divorce.

[Guest b2kates]

It is possible for courts to issue orders as "nunc pro tunc" that is retroactive. but it would not be a valid QDRO if it seeks retroactivity longer than the 18 month window.

It appears that the AP's attorney did not act timely and is trying to protect him/herself; or the AP did not notify attorney timely.

the best way to get the 18 months of payments would be for the court to order P to pay to AP

good luck

[Kirk Maldonado]

Isn't there also an issue about the plan not be operated in accordance with its terms if the QDRO is given retroactive treatment for more than 18 months, and the plan limits the retroactivity to 18 months?

[mbozek]

Its also a qualfication issue since QDROs are an exception to the non alienation requirements of 401(a)(13). Approving a DRO that requires payment after more than 18 months would violate the nonalienation provisions.

[QDROphile]

The only one who is making sense is Kevin Wiggins. The issue depends on the facts and no one has bothered to discuss anything concrete.