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Alternate Payee dies before distribution and w/o naming a beneficiary


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The implication in the first post of Mellish is that there is a carve out. To the extent something is carved out it is done so permanently (barring a revised QDRO trying to muddy the waters). But then there is a reference to the fact that the QDRO calls for initially making said carve out at some point in the future (when P reaches earliest retirement age I would guess) which argues for the fact that there is no existing carve out until P reaches said early retirement age. So, if there is no carve out then there is nothing taken from the P at the point in time that B dies and therefore B loses all rights that might have been determined at some point in the future.

So, which is it? A carve out or not?

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Thanks for all the replies.

The QDRO states that the AP can begin receiving her benefit at the time the P reaches earliest retirement age. Pretty standard language.

P has not yet reached earliest retirement age, so AP couldn't have started her benefit yet.

While I think there could be reasonable arguments in any direction, it's my opinion that the benefit should revert to the Participant due to the fact that the QDRO states that's what should happen and there's nothing in the Plan prohibiting that. There is arguably language in the Plan stating that the AP cannot assign a beneficiary until she starts her benefit, so I don't believe the benefit would go to AP's estate.

Thanks again.

You cannot bash in the head of an American citizen without written permission from the State Department.

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Thanks for all the replies.

The QDRO states that the AP can begin receiving her benefit at the time the P reaches earliest retirement age. Pretty standard language.

P has not yet reached earliest retirement age, so AP couldn't have started her benefit yet.

While I think there could be reasonable arguments in any direction, it's my opinion that the benefit should revert to the Participant due to the fact that the QDRO states that's what should happen and there's nothing in the Plan prohibiting that. There is arguably language in the Plan stating that the AP cannot assign a beneficiary until she starts her benefit, so I don't believe the benefit would go to AP's estate.

Thanks again.

If the QDRO says that if the AP dies before benefits commence then the benefits revert to the participant, what is there to discuss? If the AP dies, then by the terms of the QDRO the amount allocated to the AP goes back to the participant. Or am I missing something?

Always check with your actuary first!

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My 2 cents, you're spot on with your comment. My issue is that the BOT of the Plan wants the money to go back into the Plan. I understand the desire, but I can't recommend that course of action. I just wanted to confirm my approach that reversion is what should happen.

Thanks again.

You cannot bash in the head of an American citizen without written permission from the State Department.

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Oh, you mean that they want the amount allocated to the AP, notwithstanding the provision of the QDRO calling for reversion to the participant, to be outright forfeited? That does not sound right!

Always check with your actuary first!

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Oh, you mean that they want the amount allocated to the AP, notwithstanding the provision of the QDRO calling for reversion to the participant, to be outright forfeited? That does not sound right!

Yeah, that's what they're hoping for. I understand the sentiment, but I do not agree with the practice.

You cannot bash in the head of an American citizen without written permission from the State Department.

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