QDRO approval and AP's access to funds

[Guest QDROs]

I prepared a court order which was signed by the participant (P) and the alternate payee (AP), and submitted to the plan administrator (PA). To date I have received no notification of the PA's approval of the document as a QDRO. I learned from AP that funds for AP had been set up in an account for AP, but there was a hold placed on the account. We later learned that P disagreed with the interpretation of the DRO and the amount awarded to AP (i.e., P argued to AP that AP should not get interest -- haven't we all heard that one in an up market -- and the P should not have the extra-marital loan against P's share). Meanwhile, nobody at the TPA or the Plan is talking to me (AP's attorney) or to AP. Finally, funds were released because P called to the Plan Administrator and asked that the hold be lifted.

let's see. . .if the order was "qulaified," why have we (AP and her attorney) not been notified? Why did the plan permit the P to control the release of funds to AP? Isn't that a breach of the Plan's fiduciary duty to the AP? Doesn't the plan have a responsibility to the AP to enforce the order or have P explore proper legal channels? shouldn't AP and AP's attorney have access to the account information to verify that the award corresponded to the terms of the DRO?

Any comments?

[Guest mjb]

Did you ask for the plan procedures for handling QDROs under IRC 414(p)(6)?

[J2D2]

Unless I missed it, you never stated that the order was, in fact, entered by the court. You only state that the order was signed by the P and AP. Can't be a QDRO unless it's first a DRO issued by the appropriate court.

[david rigby]

Perhaps PA considers it a draft (nothing wrong with that) and is reviwing. If so, separating the AP portion ("just in case") sounds like a prudent thing to do.

Of course, mjb is correct about the procedures. Perhaps they forgot to advise you they received your draft.

[Guest QDROs]

The proposed "QDRO" had been signed by both parties and entered with the court, and a court-certified copy had been served on the plan. (My mention of it having been signed by both parties was only to indicate that P had signed the document, presumably indicating some sort of agreement with its terms, and thereafter was causing a stink.)

So far, the point person at the plan continues her slience. I've asked for QDRO procedures, and identification of the person identified as the Plan Administrator in the SPD, but have received nothing.

My next move is a letter, citing code regarding the Plan Administrator's responsibility to determined whether the order is qualified and to notify, with a copy to the president of the company (who I suspect may be the Plan Administrator).

[QDROphile]

The requirement to furnish documents upon written request probably includes written QDRO procedures, so it might be nice to threaten the penalty. See ERISA section 502( c)(1)