Market Loss

[Guest Jodi S.]

QDRO states "The Plan Administrator of the Plan shall transfer to the Alternate Payee the sume of $23,500 of the Participant's vested account balance as of XX/XX/2008." It also states that "the distribution shall not be adjusted by earnings or losses allocable to the account as of XX/XX/2008." (same date as above - but using the wording "as of").

Once the time period for determining if the QDRO was valid and the 30 time period for written claims is over and the distribution is requested, the account value is under $23,500.

The PA determined the DRO was a QDRO and the participant has been making contributions to the plan since the XX/XX/2008 date.

Can the losses be allocable to the $23,500 from the date to current? I think that's the only correct way to run the calculation but since the PA determined the DRO was a QDRO with that wording, I don't know if they can actually do that.

[QDROphile]

The order was poorly written and the plan administrator did not interpret the order properly. The interpretation should have been the lesser of $23,500 or 100% of the account as of the specified date, adjusted to the time of payment. Now the plan administrator will have to make some unpleasant decisions about how much to pay.

[Guest Jodi S.]

The order was poorly written and the plan administrator did not interpret the order properly. The interpretation should have been the lesser of $23,500 or 100% of the account as of the specified date, adjusted to the time of payment. Now the plan administrator will have to make some unpleasant decisions about how much to pay.

Can the plan administrator request the order be rewritten to show the losses allocable to the account once the order has been approved? The order does state that "the parties stipulate any .... order approving or incorporating the provisions of this order do not require the plan to provide increased benefits (determined on the basis of actuarial value)". It would seem that incorporating the provisions of the order would provide for increased benefits, although maybe not based on an acturial value.

[J Simmons]

The order was poorly written and the plan administrator did not interpret the order properly. The interpretation should have been the lesser of $23,500 or 100% of the account as of the specified date, adjusted to the time of payment. Now the plan administrator will have to make some unpleasant decisions about how much to pay.

Can the plan administrator request the order be rewritten to show the losses allocable to the account once the order has been approved? The order does state that "the parties stipulate any .... order approving or incorporating the provisions of this order do not require the plan to provide increased benefits (determined on the basis of actuarial value)". It would seem that incorporating the provisions of the order would provide for increased benefits, although maybe not based on an acturial value.

I would suggest that you send both the employee and ex-spouse a letter with the interpretation you intend to apply, explaining that it will be applied as soon as 45 days after your letter unless either objects or an amended QDRO is received that more clearly sets out a division different from that explained in your letter. There are regulations now that clearly provide for amended QDROs for yet undistributed benefits.