QDRO in effect after remarriage to former spouse?

[Guest petert]

My 401(k) allows withdrawals of after-tax contributions and earnings while employed with the company. I've been trying to make such a withdrawal for many months with no success - the plan website simply states that there is a hold on my account, and the plan reps I spoke with on the phone couldn't explain why. A few weeks ago I spoke with a rep who finally informed my that there appears to be a QDRO in place that is the basis for this hold...

It turns out that my wife filed a QDRO when we were in divorce proceedings for our first marriage many years ago. We've since remarried each other and have been living happily ever after. But what of the QDRO?

A few minutes ago I spoke with the attorney who handled our case but she has since retired. I asked her whether the QDRO was technically still in force in our (exceptional) case but she really didn't give me a clear answer.

What effect does a QDRO have when the parties involve re-marry eachother? And what exactly do I need to submit to my plan administrator in order to get this withdrawal hold lifted from my 401(k)?

Thanks...

[david rigby]

Just my opinion, but I don't think your remarriage has any automatic impact on a QDRO. See

http://benefitslink.com/boards/index.php?showtopic=18822

The cost of hiring an attorney to get this QDRO removed (may not be the correct legal term) is just one of the costs of getting remarried.

[Guest petert]

See http://benefitslink.com/boards/index.php?showtopic=18822

Thanks for that link. I tried searching this board for a relevant post but couldn't find one. I will read through the entire post and reply here with any further questions.

The cost of hiring an attorney to get this QDRO removed (may not be the correct legal term) is just one of the costs of getting remarried.

Yes, a quick glance at the other post indicates that my immediate problem (being unable to make an allowed withdrawal) will probably not be solved without further legal action. Hopefully someone here has some experience to the contrary...

[Guest petert]

Hmm. Those links in the other post to "Fraudulent QDROs" are interesting. Hopefully my 401(k) plan admin will see that they don't apply to our case, as I’m not trying to obtain a final distribution, just an allowed in-service withdrawal. Anyway, as it turns out, a resolution may be simpler (or more complicated?) than I originally thought...

On review of my wife's copies of our divorce paperwork, I found a letter from her attorney that included a copy of my employer's response to her joinder of my company pension plan. In this letter the attorney recommended that my wife pursue preparation and service of a QDRO. The attorney's involvement apparently ended at that point, and my wife now confirms that she never followed up on her attorney's recommendation. In other words, there is no QDRO against any plan I have with my employer. (Sorry for the confusion, but I was only taking my plan rep's comments at face value.)

At this point it appears that my 401(k) plan admin is guessing about the existence of a QDRO applicable to this 401(k), based on the response that my company expected from my wife to their response to her joinder to my pension plan. Complicating this is the fact that my company was sold to another company after our divorce and remarriage, and the original joinder paperwork may not be readily available to the current administrators of these plans...

Anyway, IMO, the apparent assumption of encumbrances on my 401(k) based on a QDRO (assumed or otherwise) against my pension plan is unwarranted. Any 401(k) assets should have been dealt with in a separate joinder or explictily included in the original. In fact, I wasn't even participating in the 401(k) at the time of this settlement, so my this plan admin’s apparent concerns and opinions in this regard seem to be without merit.

The terms of the joinder to my pension plan requested that no payment or distribution be made without my wife’s prior written consent. Although (IMO, for reasons stated above) that joinder does not apply to my 401(k) plan, I see no reason why this plan admin should not immediately respond to a written notice from my wife explaining the facts of our divorce and remarriage, the lack of an applicable QDRO for any plan, and my non-participation in the 401(k) at the time of our divorce settlement. However, my concern with such a tactic is that it might set a precedent (in the plan admin's mind) requiring my wife’s intervention for similar future actions in my 401(k).

???

[QDROphile]

You have two problems. One is that you live in California, land of the idiotic "joinder."

The other is that your plan administrator has joined the idioct club and can't see through the form that was filed in order to apply the federal law correctly. My condolences. There is probably no point in dealing with the administrator to get any sensible consideration. You will probably have to go back and take action with respect to the original divorce proceeding and come up with some appropriate piece of paper that looks like some action was taken with respect to the benefits, even if it is only an order that says the former spouse is entitled to none. That piece of paper will probably have to look like a QDRO, but it is possible that there is some other form (it is a form practice in Cali-form-ia) that will demonstrate that the proceeding terminated without disposition of plan assets. It is possible that a letter from your former spouse will do, but don't count on it. You need legal help on Cali-form-ia procedure. Don't expect to solve this with logic or intelligence; neither of those characteristics are part of the system.

[Guest b2kates]

why not formally appeal the denial of distribution and make the plan demonstrate the existence of the non existing QDRO.

A request for a joinder does not constitute a QDRO, it would appear to be a breach of fiduciary duty to impose a QDRO when none exists.

[Guest mjb]

P: You should be able to use logic to receive your 401k plan distribution if the date of your divorce decree preceeds your date of participation which should be enough to convince the Plan Admin that you spouse has no interest in your benefits since your interest in the 401k plan did not arise during your first marriage. If the PA refuses your request for a distribution then you can file a claim for benefits under the plan procedues in the 401k SPD where the PA will have to respond in writing and provide a basis for denial on a non existant QDRO which was prepared for another plan.

As for your pension, what is the interest that your wife is supposed to have under the terms of the non existant QDRO? If the joinder only required that the spouse give her consent what would be the problem if your wife gave consent to a distribution which she will be required to do under the terms of the plan?

[QDROphile]

The suggestion of b2kates is a good one, but I fear that the plan administrator will continue to be wrapped up in the joinder rather than take the right step into federal law. Still, asking the the plan administrator exactly what the PA would need to see to get some movement would be helpful.

[Guest petert]

QDROphile, you are correct, this is California where I live and work. My company is also headquartered there, although I'm not sure where they are incorporated. And their benefits helpline operates out of New Jersey. Calling them about this issue has been fruitless so far. The customer service reps always state that a plan administrator will contact me about the issue but I never hear from them. The last time I had a problem with this plan I had to resort to certified mail to get them to take notice.

b2kates, yes it does appear that a joinder does not necessarily imply a QDRO, but QDROphile's logic (when he attempted to get inside this plan admin's head) probably explains this attitude.

mjb, yes, I think that as long as my wife gives written consent (even though the joinder does not apply to this plan) then I don't see how they can continue to impose this hold.

Thanks to all of you for your input. I am going to call the benefits helpline one more time to see if they have any updated status. I'm guessing that another phone call will not yield any new info, and I will eventually need to resort to another certified letter. Will let you know what happens.

[Guest petert]

OK, sorry for the delayed reply. I did call my benefits helpline right after my last post and as expected they had no news for me regarding the reason for or ultimate disposition of this hold. A few things intervened after that phone call but I won't bore you with the details.

I finally got around to sending another certified letter to the plan administrator last Saturday. This letter included a notarized affidavit from my wife stating the facts of our divorce and remarriage, including the fact that her joinder of my pension plan did not apply to my 401(k) plan (since I wasn't even participating in the 401(k) prior to our divorce), and that she never did have that QDRO drafted to protect her community property interest in my pension plan despite her lawyer's advice (good girl! ). My letter referred to her affidavit and made it clear that any concern that the PA had with regards to legal interests in my 401(k) were basically unfounded. I closed my letter with a polite request to remove the hold or respond with a valid reason why they believed the hold should remain in place.

Like my previous certified letter to this plan, this letter produced immediate results. I actually got a telephone call from a plan rep this morning (four business days after I mailed the letter) informing me that the hold on my account had been lifted and offering to initiate a withdrawal right there on the phone. I elected to do this myself via the plan website and my first in-service withdrawal is actually being processed right now.

I expect that I may need to repeat some or all of this exercise when it comes time for me to get a distribution from my pension plan. Or maybe not. Either way, it was worth the few hours of work to start out with a rational discussion with my PA rather than immediately resorting to some legal action.

"Speak softly and carry a big stick."