QDRO

[Guest rdd]

My husband divorced in February/2001 after 17 years of marriage. We married in May/2006. He retired in Aug/2006. The ex filed a QDRO in August/2006 and received a "non-qualified" response in Sept/2006 citing several reasons, the last being he is receiving benefits under a joint plan and she was not named as the surviving spouse. He received a court order to modify the QDRO to comply with Fidelity's response to the non-qualified. In the order her lawyer stated that the wife filed immediatley after divorce but it was not acknowledged by General Motors. So 5 years later they filed again. The judge signed the modified QDRO stating the ex is entitled to pension benefits. She is requesting that she be made the alternate payee and given surviving spouse status for the lifetime of the benefits. The order also states that if the Administrator does not accept this revised order, they and my huband must make the modifications to so that his ex can be given the benfits and status. Right now we are waiting on a decision from Fidelity. I know this will not end. What are our options?

[Guest mjb]

In the order her lawyer stated filed immediatley after divorce but it was not acknowledged by General Motors. So 5 years later they filed again. The judge signed the modified QDRO stating the ex is entitled to pension benefits. She is requesting that she be made the alternate payee and given surviving spouse status for the lifetime of the benefits. The order also states that if the Administrator does not accept this revised order, they and my huband must make the modifications to so that his ex can be given the benfits and status. Right now we are waiting on a decision from Fidelity. I know this will not end. What are our options?

there are a lot of isues that you need to review with counsel to determine your options:

1. What date was the DRO issued?

2. what benefits is the ex looking for - part of your husband's benefits, your survivor benefits, etc

3. I dont understand the referece to "plan must make modifications" since the plan administrator can refuse to provide benefits that are not available under the plan. The court has no jurisdiction over the plan because it is not a party to the divorce. However, court would have jurisdiction over your husband which is why you need qualified counsel.

[Guest rdd]

In the order her lawyer stated filed immediatley after divorce but it was not acknowledged by General Motors. So 5 years later they filed again. The judge signed the modified QDRO stating the ex is entitled to pension benefits. She is requesting that she be made the alternate payee and given surviving spouse status for the lifetime of the benefits. The order also states that if the Administrator does not accept this revised order, they and my huband must make the modifications to so that his ex can be given the benfits and status. Right now we are waiting on a decision from Fidelity. I know this will not end. What are our options?

there are a lot of isues that you need to review with counsel to determine your options:

1. What date was the DRO issued?

2. what benefits is the ex looking for - part of your husband's benefits, your survivor benefits, etc

3. I dont understand the referece to "plan must make modifications" since the plan administrator can refuse to provide benefits that are not available under the plan. The court has no jurisdiction over the plan because it is not a party to the divorce. However, court would have jurisdiction over your husband which is why you need qualified counsel.

Thanks -Briefly I'll answer your questions

1. The court ordered QDRO was issued in March/2007

2. Ex is looking for 50% of husbands benefits and my survivor benefit status. The modified QDRO states that her name be replaced as surviving spouse for the remainder of her natural life.

3. The orders states that if Fidelity refuses to acknowledge her as the alternate payee and surviving spouse, the Administrators and my husband must come up with an alternate plan to comply with the court ordered QDRO, that she be given these benefits. Before we got a copy in court someone hand wrote on the order "First Modification".

Their divorce decree states under Pension and Retirement that "parties will abide by the terms of the QDRO for GM hourly rate employees pension plan as contained therin."

Question - and I do appreciate the advice, I am designated as the surviving spouse because there was no QDRO filed before he retired August 1, 2006. The letter acknowledging the receipt of her QDRO is dated August 10, 2006. IF she can't get benefits from the plan can she continue to through the courts to make him personally responsible for payments?

[Mike Preston]

The timeline is a bit confusing. Retirement took place in August of 2006. There was an acknowledgement of some sort with respect to the QDRO also in August of 2006. I guess the key issue was whether your husband's ex-spouse or her attorney put the plan on notice that a QDRO was in the works before his benefit commenced. If so, it is an entirely different kettle of fish.

Assuming that the plan was *NOT* put on notice prior to the commencement of benefits, your husband's ex-spouse is likely going to face an uphill battle getting anything from the plan. We know that the ultimate decision will be in the hands of the plan administrator and the courts, but my guess is that *if* the benefits commenced properly, the plan will not allow a change. Any kind of change. Not willingly, anyway. A court could force a change, of course. But I keep coming back to the fact that the decision will first be in the hands of the plan administrator to allow or reject

If the plan *WAS* put on notice, I think the court will argue for turning back the clock and doing things the way they should have been done pending establishment of a QDRO once notice was properly given to the plan. What that means, exactly, is dependent on the terms and policies and procedures of the plan.

Can you describe the events in August, 2006 in more detail?

[Guest rdd]

The timeline is a bit confusing. Retirement took place in August of 2006. There was an acknowledgement of some sort with respect to the QDRO also in August of 2006. I guess the key issue was whether your husband's ex-spouse or her attorney put the plan on notice that a QDRO was in the works before his benefit commenced. If so, it is an entirely different kettle of fish.

Assuming that the plan was *NOT* put on notice prior to the commencement of benefits, your husband's ex-spouse is likely going to face an uphill battle getting anything from the plan. We know that the ultimate decision will be in the hands of the plan administrator and the courts, but my guess is that *if* the benefits commenced properly, the plan will not allow a change. Any kind of change. Not willingly, anyway. A court could force a change, of course. But I keep coming back to the fact that the decision will first be in the hands of the plan administrator to allow or reject

If the plan *WAS* put on notice, I think the court will argue for turning back the clock and doing things the way they should have been done pending establishment of a QDRO once notice was properly given to the plan. What that means, exactly, is dependent on the terms and policies and procedures of the plan.

Can you describe the events in August, 2006 in more detail?

Mike - Appreciate the response, we're looking for the right questions to ask. There aren't a lot of details concenring August. We didn't find out about the request until we received the letter. I do know the benefits department deep dived into his file because he did have divorce papers on file so they wanted to make sure paperwork was intitiated correctly.

He signed retirement papers on August 1, 2006. We received a letter on August 10, stating Fidelity received the QDRO request from her attorney. There were several reasons for her not to qualify pursuant to Section 206(d)(3) of the employee retirement security act of 1974 and Section 414(p) of the Internal Revenue Code of 1986, in the investigation letter that followed on Sept. 26, 2006. The last reason states that when he commended his benefit he did not name her as the beneficiary so she is not intitled to the survivor option.

[J Simmons]

rdd,

From your posts, it sounds like the plan had 'divorce papers on file' before they started the benefit payments to your husband. However, a key fact will be whether the first payment of benefits to your husband preceded Fidelity (or the benefits department) receiving the QDRO from the ex-wife in August. As Mike pointed out, that will be important. You need to get that sorted out quickly, and you need to continue to be proactive about this.

Ask for a copy of the written QDRO processing procedures of the plan, as required by ERISA 206(d)(3)(G)(ii)(I). It may or may not specify that the plan was to put your husband's benefits payout on 'hold' pending resolution of the divorce rights of the ex-wife to part of your husband's benefits.

Begin an e-mail dialogue with the benefits office and Fidelity, asking what the normal procedures for THIS plan are regarding a hold, what type of order or mere notification received will trigger the hold, and for how long. Then follow this with questions probing into more detail than the "non qualified response" gave for denying the QDRO attempt from August. The more detail you have, the better equipped you'll be and the more times they repeat their reasons, the firmer they will be in defending them against the claims of the ex-wife.

You also want to ask for the plan document provisions about how much discretion the plan administrator is given with respect to interpreting the plan and deciding claims. Most plans give broad discretion.

Then, you might want to put the benefits office and Fidelity on notice that you and your husband will not accept any reversal of the determinations made in August and September, and suggest that before the plan kowtows to the state divorce court (that will likely continue to favor the ex-wife), the plan ought to interplead the issue into federal court. There, if the benefits office/Fidelity's decision was a reasonable one, it will likely be upheld by the court--even if the ex-wife's position is also a reasonable one and perhaps viewed as a more persuasive one. The court will defer to the plan administrator's decision, provided the plan gave broad discretion to the plan administrator and the plan administrator's position is a reasonable one.

[Mike Preston]

Everything J Simmons has said is pretty much right on.

So step back a bit and try to get a handle on the big picture. Your husband's pension is in the middle of a dispute between multiple parties. You have, at least, in no particular order, your husband's ex-spouse, the ex-spouse's attorney, your husband, the judge, and you.

There are so many possible alternative resolutions available, none of which will likely make all parties happy, that you need to decide early on in the process whether you want to be pro-active in this process or not. The more pro-active you want to be, the more it makes sense for you to engage family law/ERISA counsel to guide you through the maze.

Keep in mind that it is not entirely clear whose side of the brewing controversy between your husband's ex-spouse and the plan you and your husband should be on. Assume, for a moment, that the plan digs in its heels and wins. No changes to the existing benefits are to be made. At that point, what happens to your husband (and by extenstion, you) ultimately shifts to the family law court. Can that court, in light of the plan's position, pursue a course of action against your husband that you would rather avoid? If so, does it mean you should be teaming up with them to see if the plan won't allow a change?

Or is your husband in a position where the family court really has nothing it can do other than sink its teeth into the pension? In this case, it might be argued you should join forces with the plan and argue for no changes to the pension.

Nobody on BenefitsLink is going to be able to properly guide you through this process.

In almost all cases the right thing will be for you to engage counsel and determine your course of action from there.

What the folks here on BenefitsLink *can* do is let you know the types of things to ask for so that your attorney's job is made easier (like the information J. Simmons asked you to get from the plan regarding its own policies and procedures).

In my experience, family court judges feel they have broad lattitude to fashion a solution they feel is appropriate. They don't generally take kindly to being told that this lattitude is limited. Sometimes when it is made clear that their hands are tied in one area, they fashion an alternative resolution which is much less satisfying to one, if not both, of the parties.

Good luck and if you feel like keeping us informed, I'm sure many, myself included, would be interested in hearing how things end up.

You might not want to disclose too much about what your strategy is likely to be before things are settled, though, because this is a public forum. At some point in the proceedings your husband's ex-spouse or her attorney may find their way here. So don't put anything here that your attorney, should you engage one, would be unhappy you disclosed.

Take care,

mike

[Guest rdd]

Everything J Simmons has said is pretty much right on.

So step back a bit and try to get a handle on the big picture. Your husband's pension is in the middle of a dispute between multiple parties. You have, at least, in no particular order, your husband's ex-spouse, the ex-spouse's attorney, your husband, the judge, and you.

There are so many possible alternative resolutions available, none of which will likely make all parties happy, that you need to decide early on in the process whether you want to be pro-active in this process or not. The more pro-active you want to be, the more it makes sense for you to engage family law/ERISA counsel to guide you through the maze.

Keep in mind that it is not entirely clear whose side of the brewing controversy between your husband's ex-spouse and the plan you and your husband should be on. Assume, for a moment, that the plan digs in its heels and wins. No changes to the existing benefits are to be made. At that point, what happens to your husband (and by extenstion, you) ultimately shifts to the family law court. Can that court, in light of the plan's position, pursue a course of action against your husband that you would rather avoid? If so, does it mean you should be teaming up with them to see if the plan won't allow a change?

Or is your husband in a position where the family court really has nothing it can do other than sink its teeth into the pension? In this case, it might be argued you should join forces with the plan and argue for no changes to the pension.

Nobody on BenefitsLink is going to be able to properly guide you through this process.

In almost all cases the right thing will be for you to engage counsel and determine your course of action from there.

What the folks here on BenefitsLink *can* do is let you know the types of things to ask for so that your attorney's job is made easier (like the information J. Simmons asked you to get from the plan regarding its own policies and procedures).

In my experience, family court judges feel they have broad lattitude to fashion a solution they feel is appropriate. They don't generally take kindly to being told that this lattitude is limited. Sometimes when it is made clear that their hands are tied in one area, they fashion an alternative resolution which is much less satisfying to one, if not both, of the parties.

Good luck and if you feel like keeping us informed, I'm sure many, myself included, would be interested in hearing how things end up.

You might not want to disclose too much about what your strategy is likely to be before things are settled, though, because this is a public forum. At some point in the proceedings your husband's ex-spouse or her attorney may find their way here. So don't put anything here that your attorney, should you engage one, would be unhappy you disclosed.

Take care,

mike

Thank you all for the information. It gives us a good place to start and what possible options we may have. I will keep you informed. As the 2nd wife my intentions are not to cut out the 1st wife, however, I don't want her or her attorney's lack of follow up to give any more grief than needed. Thanks again.

[Guest mjb]

This is a case where expert counsel is needed to advise both you and your husband on your rights under the applicable laws including

1. What is the basis for the courts jurisdiction for issuing a DRO in 2007. A property settlement under a divorce decree is considered a contract and once the decree is final the court usually cannot adjudicate any further issues for which jurisdiction was not reserved in the divorce decree. Courts usually reserve jurisdicton to modify the divorce decree for changes such as an increase in child support. You need to review the divorce decree with your counsel to determine if the court has jurisdiction to require your husband to make the payments to the ex spouse outside of the pension plan.

2. The state court has no jurisdiction over you or the pension plan because you are not parties to the divorce so sanctions cannot be enforced against either of you. It is highly unlikley that the state court could punish your husband for the refusal of the plan to provide the benefits to the ex-spouse that the court has ordered because this would violate due process.

3. Your rights as a contingent beneficiry of the survivor benefits vested when your husband retired and are protected under federal law. The plan will never agree to substitute the ex spouse as the surviving spouse while she is alive and then return you to surviving spouse status after her death because that is not a benefit provided under the plan (because it could require paying benefits over both of your lives with additonal cost) There are also rulings from the IRS that a reduction in benefits once payments commence is an impermissible forfeiture.

4. The delay by the ex spouse in enforcing her rights to your husband's benefits between 2001-2006 could be subject to a statute of limitations which applies to this case. Under the doctrine of latches a federal court could deny the ex-spouse's claim to benefits under the plan if there was an unreasonable delay in pursuing enforcement of her rights which resulted to a detriment to another party (you or your husband). The detriment to you would be the loss of your vested survivor benefits under the plan.

[masteff]

I'd suggest that two issues need to be looked at slightly separately.

The first is the right of the ex-spouse to a benefit as an alternate payee. This is a sometimes unavoidable consequence of divorce.

The second is the ex's demand to be made the surviving spouse. There is NOTHING that requires she get that, but it doesn't hurt her to ask for it. I would take the position that since the participant (your husband) has remarried (to you), then the ex-spouse should NOT be allowed to be the surviving spouse, unless something in the divorce decree/property settlement explicitly says to give her that. (After a quick re-reading of mjb's comments above, refer to mjb's #3 on this issue)

So if what you're really wondering is what part of this you should fight, I'd fight the surviving spouse thing (unless it was in the decree or settlement).

[Guest mjb]

rdd: You should have counsel review Boggs v. Boggs 520 US 833 (1997) which involved spousal rights to pension benefits where the US Supreme ct held that under ERISA section 205 a participant's spouse cannot be deprived of survivor benefits without providing written consent. This indicates that a former spouse cannot be granted surviving spouse benefits after an employee remarries (even if the employee has not retired) because those rights are the property of his new spouse.

[Steelerfan]

I agree with mjb, only a current spouse has survivor rights. I'ver never heard of an ex-spouse getting survivorship. The statute is not set up that way. If a judge rules that an ex can be a surviving spouse, I would check to see what he is wearing under his robe.

[J Simmons]

Steelerfan,

I take your comments to be that the ex-spouse can't first be designated as the 'surviving spouse' after a new spouse acquires survivor rights, as mjb's comment points out. Before that time, before a new spouse acquires such rights, it seems the statute does contemplate that the ex-spouse could be granted the 'surviving spouse' status despite the marriage ending (IRC sec 414(p)(5)) and thus a later spouse would not become the 'surviving spouse' as to any benefits the ex-spouse was previously so designated, including those retained by the employee.

[QDROphile]

I don't think the timing is so sensitive. A domestic relations order can qualify and provide for a former spouse to have an interest "with respect to" any of the particpant's benefits, including derived benefits such as spouse death benefits. Don't read so much into Boggs, and Hopkins vs AT&T is wrongly decided. Orders issued after the participant's death are tricky, but a former spouse can get amounts even from the surviving spouse annuity of the subsequent spouse. Timing can affect form and amount of payment, but a former spouse is not locked out by remarriage. I know some of these statements will inflame mjb. The point has been argued in this forum before and I am not going further with it. A lawyer who puts those blinders on is not serving the client.

No comment on how a state court will look at dividing benefits accrued before and after the first marriage. No comment on equitable concerns, such as latches, except to say that plan administrators should leave those concerns to the courts.

[Steelerfan]

J-Simmons:

Yeah. You need the QDRO to do it, but where is the authority to do it when there is a new spouse? Just take a bite and end it (Seinfeld anyone?).

What QDROphile is saying sounds way out in left field to me. It is a shame if that is going on. I do not believe that under the Retirement Equity Act Congress intended for former spouses to reach a surviving spouse's annuity after remarriage. The spousal survivorship rights are a federal property right and should not be disrupted by state law QDROs after a new spouse has vested in such rights.

[Guest mjb]

Dispite what Q believe timing is important in equity claims such as ERISA and an AP does not have an unlimited amount of time to file a DRO. In addition to the case law cited above the AP can be denied a share of benefits provided under a DRO under the doctrine of latches which is defined as unreasonable delay by a aggrieved party coupled with detriment to another party such as the surviving spouse. In other words, if the AP unreasonably delays presenting a DRO until the employee has remarried and retires (e.g., because the AP wasnt sure when his benefits would commence) the courts will deny an otherwise meritorious claim for benefits.

I am interested in any cases post Boggs (1997) where a court awarded a former spouse surviving spouse benefits under a QDRO which deprived a current spouse of survivor benefits.

Also this type of case usually arises after the participant has remarried and retired which will require that the plan administrator treat the AP's DRO as a claim for benefits under ERISA and subject to the claims procedures of ERISA unless the Plan Admin elects to file for interpleader.

[Steelerfan]

The 4th and 5th circuits have put limits on former spouses seeking survivor status:

"Retirement day vesting" rule. A plan participant's former spouse may be eligible to receive surviving spouse benefits, but only pursuant to a qualified domestic relations order. The Fourth Circuit, in determining that a court order giving a former spouse rights to her ex-husband's pension in order to collect an alimony judgment was not qualified, adopted a "retirement day vesting" rule, under which the retirement benefits were found to have vested in the participant's current wife on the day he retired. Hopkins v. AT&T Global Information Solutions Co.

The following case from the 5th Cir illustrates my point about taking a bite and ending it. After realizing her QDRO didn't make her a surviving spouse, wife 1 sues after p dies because her payments stopped.

A plan participant divorced his wife, who thereafter obtained a QDRO which entitled her to a portion of the participant's pension benefits as an alternate payee. In the meantime, the participant had remarried.

Upon the death of the participant, the plan stopped making payments to the ex-wife, who then claimed the right to continue receiving the annuity or to receive the joint and survivor annuity as his surviving spouse. The trial court held that the participant's annuity, out of which the ex-wife had been receiving her payments terminated at the participant's death and that she was not entitled to the qualified joint and survivor annuity because she was not the qualified spouse.

The appellate court upheld the lower court's decision, noting that the ex-wife did not fall within any of the definitions of a surviving spouse and that the QDRO did not designate her as the participant's qualified spouse for purposes of the survivor's pension. The court recognized that the monthly payment specified in the QDRO had no relationship whatsoever to the surviving spouse annuity, and that the mere fact that the ex-wife was the alternate payee by reason of the QDRO did not automatically make her a surviving spouse. Therefore, the court held that the participant's widow was the qualified spouse and thus entitled to the surviving spouse annuity. Janice Brown Dorn v. International Brotherhood of Electrical Workers, U.S. Court of Appeals, Fifth Circuit, No. 98-31046, May 18, 2000, 211 F3d 938, 24 EBC 1824

[Steelerfan]

I am interested in any cases post Boggs (1997) where a court awarded a former spouse surviving spouse benefits under a QDRO which deprived a current spouse of survivor benefits.

BRAEHLER v. FORD MOTOR COMPANY UAW RETIREMENT PLAN

Docket: No. 3:06CV-306-R. , 2007 WL 1805045 (W.D.Ky.)

Current spouse got nothing even though H had her listed as SS after divorce of W1. This ruling confuses me because I can't see the rationale for not at least giving the new spouse amounts that accrued after the date of entry of the QDRO. But the court appears to have ruled that the former spouse is the only surviving spouse that can exist and gets all of the benfit. I don't get it. Did I miss something?

[Guest mjb]

Flush language of 205© provides that consent by a spouse to waive J & S shall be effective with respect to such spouse. Property subject to divorce is limited to property acquired during the marriage. Since current spouse is entitled to J & S upon marriage to employee she will be entitled to all J & S benefits that accrue after marriage ends. Maybe the court misunderstood what benefits are subject to division in divorce in KY.

After reading a summary of the case it is possible that the courts decision is correct under ERISA in confirming that the AP had a right to all of the survivor benefits accrued after the divorce. I have seen many cases of buyer's remorse in divorce where the employee voluntarily gives the spouse all of the Survivor benefits he will accrue as of the date of future retirement under a property settlement agreement which becomes incorporated as part of the divorce decree which become the basis for the QDRO. In other cases, there is no mention of the rights to survivor benefits in the divorce decree but the employee voluntarily grants the ex spouse the rights to all the survivor benefits under the plan in the QDRO. In both cases after the QDRO is approved by the plan administratror the employee remarries and discovers that all of the new spouse's survivor benefits were granted to the AP. The employee or spouse 2 then attempts to have the AP waive the rights to the survivor benefits accrued after divorce without success.

In Braehler spouse 2 brought an action against the plan b/c the QDRO granted all of the survivor benefits under the plan to the AP. If the employee voluntarily granted the survivor benefits that accrue after divorce to the AP in a property settlement or in agreeing to the QDRO (instead of the court awarding the post divorce survivor benefits as a matter subject to its jurisdiction over marital assets under state law) there would be no inconsistency with Boggs or 205 of ERISA becuase the parties voluntarily agreed to the division of the benefits.

[Steelerfan]

Clearly the court awarded her only the benefit that accrued up to the date of the order. So what happened to the post divorce accruals? Since they can't go to the ex-W, they would have be forfeited. That doesn't seem fair or legal, but it is the logical result if W2 can't be a SS.

[Guest mjb]

see my revised post.

[Steelerfan]

see my revised post.

I thought the court made it clear that the QDRO only gave her benefits only through the date of divorce and not beyond. In which case there would have had to have been a forfeitre. Otherwise, I agree with you, it could be right.

I think the P didn't argue this case properly.