QDRO

[Guest MC2]

A Participant in a multiemployer pension plan gets a divorce and enters into a QDRO. The determination date used for the Participant's accrued vested benefit calculation is June 15, 2005. The percentage awarded to the Alternate Payee is 50%. The Alternate Payee began receiving benefit payments shortly after the determination date stated above. The Participant, however, continued to work. In that the Participant continued to work he became eligible to receive a benefit enhancement that was instituted after the Alternate Payee began to receive her benefit payments. Is the Plan require to apply this benefit enhancement to the Alternate Payee's payments in that the Participant will be receiving the same upon his imminent retirement? If you can cite to any authority on the matter that would be great, as well.

Thank you.

[Guest mjb]

The answer depends on the language of the QDRO. Some QDROs provide for increases in benefits to the AP if the participant becomes eligible for a benefit enhancement after benefits commence to the AP, some do not. If the APs benefit is determined as of a date certain with no provision for an increase in benefits at a later date due to an enhancement that was not provided under the plan as of the date of the QDRO then the AP is not eligible to share in the benefit enhancement.

Q under the QDRO was the AP entitled to recieve any increase in benefits which accrued after 6/15/05?

[Guest MC2]

The answer depends on the language of the QDRO. Some QDROs provide for increases in benefits to the AP if the participant becomes eligible for a benefit enhancement after benefits commence to the AP, some do not. If the APs benefit is determined as of a date certain with no provision for an increase in benefits at a later date due to an enhancement that was not provided under the plan as of the date of the QDRO then the AP is not eligible to share in the benefit enhancement.

Q under the QDRO was the AP entitled to recieve any increase in benefits which accrued after 6/15/05?

The QDRO provides, in pertinent part, the following: "The basic award shall be increased if applicable by any cost of living increases granted to the Participant as a Retiree under the Plan in proportion to the ratio of the portion of the accrued benefit assigned to the Alternate Payee to the benefit otherwise payable to the Participant under the Plan before any assignment to the Alternate Payee. If there is an enhancement in the Participant's benefit due to a change of plan formula, this enhancement shall be applied to the Alternate Payee's benefit as well as the Participant's."

[Guest mjb]

Doesnt the QDRO answer your Q regarding enhancements?

[Guest MC2]

Doesnt the QDRO answer your Q regarding enhancements?

well, i'm not sure b/c the QDRO says "the basic award shall be increased if applicable by any cost of living increases granted to the Participant as a retiree . . . " the enhancement went into effect after the Alternate Payee began to receive payment and before the Participant retired. and then later it says "if there is an enhancement in the Participant's benefit due to a change of plan formula, this enhancement shall be applied to the Alternate Payee's benefit as well as the participant's." so is "cost of living" the same as a "benefit enhancement" and if so, the Alternate Payee would not be entitled to the same b/c the "benefit enhancement" went into effect before the Participant retired, right?

[david rigby]

No "cost of living" is not identical to "enhancement". As mjb as suggested, the language you quote about "enhancement" implies the plan was amended after the AP began receiving payments and affects the benefits of the participant. Depending on the definition of that enhancement, it is possible that the AP should share in its effect. It is also possible that the terms of the QDRO should trigger the plan administrator to increase the benefit to the AP automatically. Read the QDRO carefully. Read the enhancement carefully.

Just an opinion: an increase in the participant's benefit solely due to an increase in the participant's comp is not an "enhancement", based on the language you quote but there may be other relevant QDRO provisions to read before drawing a conclusion.

BTW, do you represent the plan, the AP, the participant, other?