QDRO Compliance

[Guest papillon]

Folks,

Any thoughts as to whether or not qualifying an unsigned DRO is a violation of the fiduciary's responsibility under ERISA?

The judge signed the DRO, however, none of the parties signed. Neither Attorneys signed - the weren't aware of the DRO. Nor did my ex-wife sign - (she was effectively representing herself pro-se). Instead, she listed the Atty's info (bar #, address, tel no.) but ommitted their signatures.

An unsigned order, pleading, etc. - gives me certain minimal rights against my ex-spouse for a violation of the MO Rules of Civil Court (55.03). However, she is what has euphemistically been referred to as "judgement proof." I filed an ERISA claim with the plan based upon the failure of the fiduciary to provide timely notice of the qualification of the DRO. However, I'm interested in knowing whether or not other grounds for action exist.

For those of you that know, would qualifying a DRO that has the judge's signature (but none of the parties) raise any eyebrows?

Regards,

Bjorn

[JanetM]

State law determines how QDRO is drafted. I have seem some QDROs that were only signed by judge - and they were valid. Some states require the attornys to sign, some the participant and alt payee.

Check on the state laws

[Guest papillon]

State law determines how QDRO is drafted. I have seem some QDROs that were only signed by judge - and they were valid. Some states require the attornys to sign, some the participant and alt payee.

Check on the state laws

Hmmm, that's not good (for me). I don't have any problem getting a judgement against the ex-spouse. Unfortunately, there is no relief available there ("judgement proof.")

Variations from State to State (and no arbitrary standard) would lead me to believe that Fidelity could reasonably assume that a State Judge's signature would be sufficient vetting of the document.

Thanks for replying.

Bjorn

[QDROphile]

A fiduciary is generally excused from concerns relating to state law, such as procedural rules. If if the ordered was issued by the court, the fiduciary does not look behind the issuance. The fiduciary takes it at face value.

[Guest zora]

"I filed an ERISA claim with the plan based upon the failure of the fiduciary to provide timely notice of the qualification of the DRO."

I'm not sure what you mean by this.

But I agree with QPhile. The courts and the DOL have made it clear that the plan administrator should not question the DRO to determine whether its valid because your ex did not sign it. It should simply determine whether the DRO is or is not a QDRO.

[Guest papillon]

"I filed an ERISA claim with the plan based upon the failure of the fiduciary to provide timely notice of the qualification of the DRO."

I'm not sure what you mean by this.

But I agree with QPhile. The courts and the DOL have made it clear that the plan administrator should not question the DRO to determine whether its valid because your ex did not sign it. It should simply determine whether the DRO is or is not a QDRO.

Fidelity is required by both the plan quidelines and ERISA to provide timely written notification of the qualification of the domestic relations order. In this case, Fidelity didn't actaully mail notification until more than three weeks after the DRO was deemed qualified, and more than two weeks after the disbursement was made to the A.P. The date of qualfication was Nov. 29, 2006. The disbursement was fully executed on or before December 6, 2006. The postmark on the letter notifying of the qualfication was Dec. 22, 2006. One may argue about what 'timely' and 'reasonable' mean in this set of circumstances.

I argue that the notification should have been sent in a manner to permit the plan participant to be aware of a change to his benefit and respond accordingly. I suppose in a perfect world, the Judge vetting the DRO would not make mistakes; however, in the real world - occasionally mistakes are made and reasonable notification provides the opportunity for the plan participant to take appropriate action to correct any errors. That would seem to be the spirit of the ERISA notification requirement.

In this case, the Alternate Payee (A.P.) fraudulently submitted a DRO that results in a $14,000 overpayment of benefits. The Judge signed the DRO, which was not only in conflict with the Divorce Decree, but also failed to meet the minimal requirements set forth by the MO Rules of Civil Court 50.3 i.e. the DRO was not signed by ANYONE, neither the attorneys nor the alternate payee. As the Judge has judicial immunity - further commentary on his lack of competence serves little purpose. The fact that I can have the DRO vacated is not particularly relevant after the funds have been disbursed.

Fidelity argues that any relief must be obtained from the Alternate Payee; however, as the A.P. is "judgement proof" - civil action against the A.P. is pointless. I will obtain a judgement against her; however, it will never be satisfied. Fidelity however has failed to address how their process of notification, three weeks after the fact, and two and a half weeks after the disbursement meets the timely notification requirement under ERISA.

Plan guidelines require that I file a claim, and subsequently an appeal before I file suit under ERISA. I have filed such a claim with the Plan Adminsitrator as required. I will also file the appeal. I've spoken with counsel and determined that while my case may have merit, the cost of pursuing will offset any award - as such award would be limited to $14,000 with Attorney's fees at the discretion of the court. My attorney feels that given the time and expense - I'll be trading dollars for dollars.

I may elect to file the action anyway, Pro Se; however I have no illusions of my chances of prevailing in Federal court. The judge is likely to shield Fidelity - even if Fidelity's performance as a Fiduciary was marginal. Even if the Judge did side with me that the late notification was a violation of Fidelity's Fiduciary responsibility, it is likely that they would say no relief was available (the money is gone.) Nor is a Pro Se litigant any match for an Insurance Company's trial attorney. However, much like the civil action that I am pursuing against my ex-spouse, it's primarily the principle of the matter that is driving me in this case. If this is the only "Due Process" that I'm afforded before I'm deprived of these funds - I intend to fully exercise my rights. :-)

Regards,

Bjorn

[Guest zora]

The courts have held that once a plan receives a DRO, if it is a QDRO, the plan must follow it. Good luck to you.