Non Q- DRO

[Guest BeBunk]

I have a question about an old DRO that was never Qualified by PA and letters was sent to both Attorney and ex-spouse.

Now 10 years latter, I am remarried, retired in 2007, and ex has a lawyer tring to modify so it can be re-submitted.

Does the Doctrine of Laches apply here? Does ERISA 206(d) and 414(p)(6)(A)(ii)? Also what are my options in fighting this as my spouse of 9 years is the SS and they also are trying to get me to sign a QJSA...

[J Simmons]

I think that your laches argument would have to be made in the state divorce court action where your ex-spouse's attorney is trying to modify the DRO to that it can be determined to be a QDRO.

In March 2007, the U.S. Dept of Labor issued regulations (29 CFR §2530.206) that specify that amended QDROs and QDROs issued even after the death of the participant are to be recognized by plan administrators as to yet unpaid benefits if the orders otherwise meet the requirements of IRC 414p and ERISA 206d3.

If you are now in pay-status of a joint and survivor annuity form of benefit based on your marriage to your current spouse, the plan could stop that benefit and recalculate the remaining value based on what a modified DRO might leave for you and your current spouse after the awarded benefit for your ex-spouse.

Your current spouse could possibly throw a monkey wrench into whatever your ex-spouse might succeed in getting by way of modified DRO from the divorce court (to which your current spouse is not a party and thus should not have res judicata effect). Your current spouse could post an objection to any re-calculation by the plan at this time, claiming that her interest became fixed when the joint and survivor annuity form of benefit began based on hers as the second life.

That would put the plan administrator between a rock and a hard place, and may resort to federal interpleader for direction.

[Guest BeBunk]

I have a question about an old DRO that was never Qualified by PA and letters was sent to both Attorney and ex-spouse.

Now 10 years latter, I am remarried, retired in 2007, and ex has a lawyer tring to modify so it can be re-submitted.

Does the Doctrine of Laches apply here? Does ERISA 206(d) and 414(p)(6)(A)(ii)? Also what are my options in fighting this as my spouse of 9 years is the SS and they also are trying to get me to sign a QJSA...

I also am interested in why they would want me to sign that for alternate payee, and part. are considered married for federal income tax purposes

Help someone...I feel like I am being taken to the cleaners and new wife has no rights...I thought this would become Federal matter if PA did not qualify????

[J Simmons]

Don't sign anything without first being advised by a qualified ERISA--better yet, qualified QDRO--attorney.

A "QJSA..."? QJSA is an acronym for 'qualified joint and survivor annuity'. If it is something they want you to sign that lists your ex-spouse as your 'surviving spouse', it may be something very detrimental to the position that you or you and your new spouse might want to take.

A federal matter? It is. More precisely, there are federal rules about when a qualified retirement plan must/must not recognize and honor a state divorce court order attempting to award part of your benefits under the qualified retirement plan to your ex-spouse. 414(p)(6)(A)(ii) requires that the plan within a reasonable time determine that an order presented to it is/is not a QDRO. Nothing from your facts belies that has happened. It sounds like the earlier order was rejected as not a QDRO. If the plan receives another order--the result of the modification that your ex-spouse is seeking from the divorce court--the plan must also within a reasonable time determine if it is/is not a QDRO.

The equities--like laches--must be fought out between you and the ex-spouse in the state divorce court. If the your current wife is going to lodge a claim/objection to any recalculation of benefits, that should be with the plan administrator.

[Guest BeBunk]

Don't sign anything without first being advised by a qualified ERISA--better yet, qualified QDRO--attorney.

A "QJSA..."? QJSA is an acronym for 'qualified joint and survivor annuity'. If it is something they want you to sign that lists your ex-spouse as your 'surviving spouse', it may be something very detrimental to the position that you or you and your new spouse might want to take.

A federal matter? It is. More precisely, there are federal rules about when a qualified retirement plan must/must not recognize and honor a state divorce court order attempting to award part of your benefits under the qualified retirement plan to your ex-spouse. 414(p)(6)(A)(ii) requires that the plan within a reasonable time determine that an order presented to it is/is not a QDRO. Nothing from your facts belies that has happened. It sounds like the earlier order was rejected as not a QDRO. If the plan receives another order--the result of the modification that your ex-spouse is seeking from the divorce court--the plan must also within a reasonable time determine if it is/is not a QDRO.

The equities--like laches--must be fought out between you and the ex-spouse in the state divorce court. If the your current wife is going to lodge a claim/objection to any recalculation of benefits, that should be with the plan administrator.

Okay ... I am a bit confused and I know you are trying to help indeed, I do appreciate it.

The PA would not qualify the DRO 10 years ago...and returned answer in APPR. time. We refused to sign the Modification (just placed this year 2008) due to the fact that my wife and I had seen the DOL on PA authority ...But it also states that the DOL stand is that a Federal Court would now rule on it.. (seeing PA did not qualify it)Not state or local level. We are in the court relm where orginal decree took place with a different judge.

Should we take this to a federal level, does she have a leg to stand on if we do not agree to the Modification? I just do not know where to go from here. We did hire an attorney, who basically handed us this paper, (modification) and said sign...When refused to sign it..(realizing what it was implying us to do) He dismissed us from his office, pretty much and return to tell us hopw much more it would cost and the judge may opt to open entire divorce again...(WHAT???)

We are seeing a different lawyer on Wednesday. Also how would I find a QDRO-attorney or ERISA? Any suggestion or do I just ask?

What should my new wife do at this point? Can she hire a lawyer to go to court now..or does she have to wait for judge to first make ruling? How long does she have?

What are are options if Judge rules in favor of ex-wife..do I have to sign Modification if I do not agree?

Thank you so much for the help...Sorry for all the questions just trying to find someone who know something about this and what are option are. Thanks again J Simmons

PS very important Question why would ex's attorney put on Modification, For purpose of Federal taxes, AP and P are considered married when we have been divorced 10 years???? Thanks again

[K2retire]

I am not qualified to answer any of your legal questions, but perhaps this sequence of events will help.

Step 1. Local divorce court agrees to modify the terms of the original DRO (or not)

Step 2. If the judge issues a new DRO, then the plan administrator determines if the new order is qualified (or not)

Step 3. If both of the above happen, then your current wife can take action to claim that the ex wife's claim interferes with her rights.

So, until steps 1 and 2 are completed, there is no real action for your current wife to take. Your best option would be for a divorce attorney that you hire to persuade the judge NOT to sign a new DRO. Focus on that for now.

Good luck!

[Guest BeBunk]

I am not qualified to answer any of your legal questions, but perhaps this sequence of events will help.

Step 1. Local divorce court agrees to modify the terms of the original DRO (or not)

Step 2. If the judge issues a new DRO, then the plan administrator determines if the new order is qualified (or not)

Step 3. If both of the above happen, then your current wife can take action to claim that the ex wife's claim interferes with her rights.

So, until steps 1 and 2 are completed, there is no real action for your current wife to take. Your best option would be for a divorce attorney that you hire to persuade the judge NOT to sign a new DRO. Focus on that for now.

Good luck

Thank you so very Much...Now that sound like a plan.... Can you tell me How I would go about getting ERISA or a QDRO lawyer?

Again Thanks for all the input.. we are trying to ask the right questions.

[PensionPro]

Here is a link that answers the age-old question of finding an ERISA attorney.

http://benefitslink.com/boards/index.php?showtopic=36422

[Guest BeBunk]

Thanks so much for the information...Our time is running out as new court date has been set for middle of month......

Anyone else with any helpful advice..Please..PLEASE feel free to help us out..

[QDROphile]

All the reasons why a new or revised order should not be issued should be presented to the state court, including the subsequent marriage. It may not make a difference, but you do not want to fail to make any argument at any stage. If the issue is not one properly considered at that stage, it will simply be disregarded.

Unless you made a great effort to resolve qualification in the first place and your former spouse resisted or absolutely failed to cooperate or particpate, you don't really have much to complain about. The original division can be given proper effect unless you have started retirement benefits, or the plan is designed or administered by blockheads, or you have incompetent assistance in describing the your relative rights. Athough your former spouse should have been diligent about reaching a final resolution in a more timely manner, you should not feel entitlted to a windfall. You should make sure that the orignal interests are properly framed against the current backdrop. The state court may have a different view, but your retirement plan should not.

[Guest BeBunk]

All the reasons why a new or revised order should not be issued should be presented to the state court, including the subsequent marriage. It may not make a difference, but you do not want to fail to make any argument at any stage. If the issue is not one properly considered at that stage, it will simply be disregarded.

Unless you made a great effort to resolve qualification in the first place and your former spouse resisted or absolutely failed to cooperate or particpate, you don't really have much to complain about. The original division can be given proper effect unless you have started retirement benefits, or the plan is designed or administered by blockheads, or you have incompetent assistance in describing the your relative rights. Athough your former spouse should have been diligent about reaching a final resolution in a more timely manner, you should not feel entitlted to a windfall. You should make sure that the orignal interests are properly framed against the current backdrop. The state court may have a different view, but your retirement plan should not.

We have already started retirement benefits and they have been on going for well over 17 months now. Also, considering the length of time this has taken, would the Anti-alienation provision apply here, being the DRO was non qualified? We would be finacialy strapped, should this go to her favor.

Anything we can do to prevent this?

Thank you for time and input

[david rigby]

...would the Anti-alienation provision apply here, being the DRO was non qualified?

A QDRO is the specific legal exception to the anti-alienation provision, and the exercise of having a DRO reviewed by the plan administrator, to determine if it should be accepted as a QDRO, is an important part of the process.

Excellent comments above from JSimmons and QDROphile.

[GBurns]

BeBunk

As my grandaughters often advise, You need to chill !

You have been given excellent advice here. I suggest that you re-read these posts and pay particular attention to the sequence advised.

Make sure a full and competent presentation of all facts and circumstances, past and specially present, are presented to the judge in divorce court. I cannot think of anything that should be left out. Then repeat with the PA if necessary. Neither the judge or the PA has anything to gain by being unfair, but since they are only human they will respond to whatever attitude you present.

Stop jumping ahead and stop seeking loopholes and "gotchas".

Good luck and let us know the outcome. You never know who else has the same problem.

[Guest BeBunk]

...would the Anti-alienation provision apply here, being the DRO was non qualified?

A QDRO is the specific legal exception to the anti-alienation provision, and the exercise of having a DRO reviewed by the plan administrator, to determine if it should be accepted as a QDRO, is an important part of the process.

Excellent comments above from JSimmons and QDROphile.

Thank you so much for input. The DRO was dis-qualified by the PA 2 different times. The ex-spouse was notified and so was her then attorney. The second time around, they did nothing. Therefore it was never made a QDRO. Now ex has hired new attorney and trying to re-open case 10 years after divorce. My current wife and I have been married well over 9 years and new wife is on retirement, as SS. Our retirment had already been started and on going for over 14 months when we first was notified of ex trying to re-open and Modify old DRO. Here is something I want advice on.. I will High-lite part my question is on. Thanks so much....

The QDRO Exception To ERISA's Anti-Alienation Requirements

One of the very few exceptions to ERISA's anti-alienation format was provided by Congress in the 1984 amendments to ERISA known as the Retirement Equity Act, and codified as 29 U.S.C. § 1056(d)(3)(A). This exception established qualified domestic relations orders, called QDROs. The section distinguishes between non-qualified domestic relations orders, which are not exempt from anti-alienation under ERISA[, and qualified domestic relations orders, which are exempt. However, beyond the simple procedural requirements listed in 29 U.S.C. § 1056(d)(3)©-(D), the statute does not mention specific substantive distinctions between qualified and non-qualified domestic orders. This is because Congress did not want retirement plan administrators to be tied up in endless domestic relations litigation.10 Instead, Congress used general language in 29 U.S.C. § 1056(d)(3)(B)(i)(I) to provide that alternate payees must have legitimate rights to have benefits assigned to them. Thereafter, plan administrators have no further liability for determining the propriety of a domestic order, can sequester or interplead the disputed amount, and can leave substantive disputes for the court to determine. However, the statute clearly provides an opportunity for the plan participant to challenge whether the domestic order is a QDRO by petitioning the federal court to determine if a domestic order is one that should be considered qualified under ERISA in 29 U.S.C. § 1132.11

[J Simmons]

An order is a domestic relation order (DRO) if it relates to providing alimony or marital property rights to a former spouse (414p1Bi) and is made pursuant to a state domestic relations law (such as community property laws) (414p1Bii).

If the order that is issued by the divorce judge and the presented to the plan administrator meets that first set of criteria, then the plan administrator must undertake a process to determine if if meets a second set of criteria. The second set is to determine if the DRO qualifies to be recognized and honored by the retirement plan. (E.g., is the DRO qualified to be exempt from the general rule of anti-alienation?)

Only if the DRO meets the second set of criteria and is thus qualified is the plan administrator allowed to recognize the order and honor it by taking some of your benefits and giving them instead to your ex-spouse.

In the divorce court proceedings where the question of modification now sits, you need to present your fairness arguments (i.e., equities arguments), including how the failure of your ex-spouse to take steps to perfect the old DRO as a QDRO led you and your current spouse to plan your retirement, depending on resources that it now turns out you would not have if your ex-spouse is successful. Maybe, for example, you retired earlier than you would have had you known that you and your current wife would not have all the pension you've been receiving the past 17 months. Point that out to the court, and how your old job is not open to you to return to and how this will work a hardship now at this late date.

If the divorce judge issues a modified order, it will likely be presented to the plan administrator by your ex-spouse. The plan administrator's role is not to second guess the equities/fairness that the divorce court sorted out. The plan administrator's role is simply to make sure the order does/does not have certain 'bells and whistles' that make it a QDRO. The plan administrator's job is not to second guess the divorce judge as to whether the order is fair or makes an equitable split of your benefits between you and your ex-spouse.

It is at this stage that your new spouse's claims become more acute. She can make a claim with the plan administrator that she is and should remain the 'surviving spouse' of all your benefits because she qualified as the surviving spouse of all those benefits on your annuity starting date.

[Guest BeBunk]

An order is a domestic relation order (DRO) if it relates to providing alimony or marital property rights to a former spouse (414p1Bi) and is made pursuant to a state domestic relations law (such as community property laws) (414p1Bii).

If the order that is issued by the divorce judge and the presented to the plan administrator meets that first set of criteria, then the plan administrator must undertake a process to determine if if meets a second set of criteria. The second set is to determine if the DRO qualifies to be recognized and honored by the retirement plan. (E.g., is the DRO qualified to be exempt from the general rule of anti-alienation?)

Only if the DRO meets the second set of criteria and is thus qualified is the plan administrator allowed to recognize the order and honor it by taking some of your benefits and giving them instead to your ex-spouse.

In the divorce court proceedings where the question of modification now sits, you need to present your fairness arguments (i.e., equities arguments), including how the failure of your ex-spouse to take steps to perfect the old DRO as a QDRO led you and your current spouse to plan your retirement, depending on resources that it now turns out you would not have if your ex-spouse is successful. Maybe, for example, you retired earlier than you would have had you known that you and your current wife would not have all the pension you've been receiving the past 17 months. Point that out to the court, and how your old job is not open to you to return to and how this will work a hardship now at this late date.

If the divorce judge issues a modified order, it will likely be presented to the plan administrator by your ex-spouse. The plan administrator's role is not to second guess the equities/fairness that the divorce court sorted out. The plan administrator's role is simply to make sure the order does/does not have certain 'bells and whistles' that make it a QDRO. The plan administrator's job is not to second guess the divorce judge as to whether the order is fair or makes an equitable split of your benefits between you and your ex-spouse.

It is at this stage that your new spouse's claims become more acute. She can make a claim with the plan administrator that she is and should remain the 'surviving spouse' of all your benefits because she qualified as the surviving spouse of all those benefits on your annuity starting date.

Thank you so very much... I believe We understand now and that was all we was trying to do.... these things become very complicated and like I said earlier, the attorney we had hired, appeared to be walking us down a road we did not want to take. Thank YOU.. and God Bless all of you who try to help those of us who are doing the best we can to undersatnd.

[QDROphile]

If you have started benefits in the form of a QJSA, You might like to know the the 9th Circuit has joined certain others and ruled that the survivor benefit has "vested" and cannot be compromised by a domestic relations order. Carmona v. Carmona. However, the decision was based on terrible facts and at least was more thoughtful than the decision in AT&T v. Hopkins. The 9th Circuit holds open the possibility of different results under different circumstances. One thing can be said for sure, alternate payees need to advance the domestic relations order promptly and diligently to avoid having their interests preempted.

I have repeatedly criticized the AT&T v. Hopkins result. It looks like the trend is for QJSA to win over QDRO. I only hope that the insight of the 9th circuit has traction and the outcome will be different if the circumstances warrant. The circumstances did not so warrant in Carmona.

[Guest BeBunk]

If you have started benefits in the form of a QJSA, You might like to know the the 9th Circuit has joined certain others and ruled that the survivor benefit has "vested" and cannot be compromised by a domestic relations order. Carmona v. Carmona. However, the decision was based on terrible facts and at least was more thoughtful than the decision in AT&T v. Hopkins. The 9th Circuit holds open the possibility of different results under different circumstances. One thing can be said for sure, alternate payees need to advance the domestic relations order promptly and diligently to avoid having their interests preempted.

I have repeatedly criticized the AT&T v. Hopkins result. It looks like the trend is for QJSA to win over QDRO. I only hope that the insight of the 9th circuit has traction and the outcome will be different if the circumstances warrant. The circumstances did not so warrant in Carmona.

I can't agree more. It is not right that 10 years later, someone can walk back into a court and try NOW to persue something that meant so little 10 years ago.

Thanks for input

[J Simmons]

BeBunk,

Please re-read QDROphile's post. While he gives citation to court decisions that would favor yours and your current wife's rights trumping those of the former wife, QDROphile pointed out that the Carmona decision (9/17/2008) opens the door for a bit more intensive analysis by the court as to whom ought to prevail.

[GBurns]

BeBunk

Re-read ALL the posts and stop getting hung up an emotional issues. I would hate to see the judge take hard line because of you possible attitude and demeanour and decide to "show you" something.

[Guest BeBunk]

BeBunk,

Please re-read QDROphile's post. While he gives citation to court decisions that would favor yours and your current wife's rights trumping those of the former wife, QDROphile pointed out that the Carmona decision (9/17/2008) opens the door for a bit more intensive analysis by the court as to whom ought to prevail.

Thank you J simmons, I have taken to heart the Equities Arguments. If you ask for equity, you must do equity.

Thanks so much will keep you posted.

[Guest mjb]

I have a question about an old DRO that was never Qualified by PA and letters was sent to both Attorney and ex-spouse.

Now 10 years latter, I am remarried, retired in 2007, and ex has a lawyer tring to modify so it can be re-submitted.

Does the Doctrine of Laches apply here? Does ERISA 206(d) and 414(p)(6)(A)(ii)? Also what are my options in fighting this as my spouse of 9 years is the SS and they also are trying to get me to sign a QJSA...

BeBunk:

Before anyone can help please state what are the benefit rights that your ex wants- is it a portion of your retirement benefits, surviving spouse benefits, etc.

What is the current status of the DRO?

I dont think latches is a defense in divorce court because latches is a defense in an equity action for benefits under ERISA whereas divorce is usually an action in law. Latches (undue delay by your ex which result in a detriment to you or your wife) would be a defense to your ex's claim for benefits under the plan. The plan administrator could and should deny the ex's claim now that you are remarried and retired because the ex took no action to perfect her claims for 10 years.

[Guest mjb]

I have a question about an old DRO that was never Qualified by PA and letters was sent to both Attorney and ex-spouse.

Now 10 years latter, I am remarried, retired in 2007, and ex has a lawyer tring to modify so it can be re-submitted.

Does the Doctrine of Laches apply here? Does ERISA 206(d) and 414(p)(6)(A)(ii)? Also what are my options in fighting this as my spouse of 9 years is the SS and they also are trying to get me to sign a QJSA...

BeBunk:

Before anyone can help please state what are the benefit rights that your ex wants- is it a portion of your retirement benefits, surviving spouse benefits, etc.

What is the current status of the DRO?

I dont think latches is a defense in divorce court because latches is a defense in an equity action for benefits under ERISA whereas divorce is usually an action in law. Latches (undue delay by your ex which result in a detriment to you or your wife) would be a defense to your ex's claim for benefits under the plan. The plan administrator could and should deny the ex's claim now that you are remarried and retired because the ex took no action to perfect her claims for 10 years.

[Guest BeBunk]

I have a question about an old DRO that was never Qualified by PA and letters was sent to both Attorney and ex-spouse.

Now 10 years latter, I am remarried, retired in 2007, and ex has a lawyer tring to modify so it can be re-submitted.

Does the Doctrine of Laches apply here? Does ERISA 206(d) and 414(p)(6)(A)(ii)? Also what are my options in fighting this as my spouse of 9 years is the SS and they also are trying to get me to sign a QJSA...

BeBunk:

Before anyone can help please state what are the benefit rights that your ex wants- is it a portion of your retirement benefits, surviving spouse benefits, etc.

What is the current status of the DRO?

I dont think latches is a defense in divorce court because latches is a defense in an equity action for benefits under ERISA whereas divorce is usually an action in law. Latches (undue delay by your ex which result in a detriment to you or your wife) would be a defense to your ex's claim for benefits under the plan. The plan administrator could and should deny the ex's claim now that you are remarried and retired because the ex took no action to perfect her claims for 10 years.

The DRO is Non Qualified at this point and she is going after Portion of benefits for time we was married, SS rights also. The ex is taking us to court to trying to have it amended and sent back to the PA. We go to court this week to see what Judge is going to say. Her new attorney and her tried to get me to sign an Amendment and sign over QJSA to my ex, and I would not do so. The judge did not order this, just her attorney trying to get me to sign.

They also wanted me to state, (on this same paper) THAT FOR fEDERAL TAX PURPOSES, WE ARE STILL MARRIED?????? (I am not even sure what this meant and why I would say I was married to her)

I have been retired for over 17 months now and we just learned of this in September 08, when ordered back into court.

I quess we are trying to find out how if any laws appiy to her untimely filing and the fact that the DRO, was turned down 2 times in 1998, by PA.

To have it amneded now, would cause great hardship to my current spouse and I as we have based our house payment among other things, on the full amount of this pension.

Had we'd known there was any holding on my pension, and we was told there was not, we would have waited another 7 to 10 years to retire.

The equity was never split on her part. Ex defied court order on all things she was to comply with, pertaining to the return of my property among other things, I too never persued them, I was happy to be rid of her (not trying to be petty here)

Now they are telling me...Well that was 10 years ago and there is nothing we can do...My question then is this...The DRO was ordered 10 years ago too and never Qualified by PA, where is the equity here?

I don't want to sound petty or like I am trying to get out of something here. It is just my currernt wife and I are just trying to move on with our lives and this is just looming over our heads with what seems to be, no end in sight.

There must be something, aside of giving EX everthing, which she got in first place, that we can do legally.

Thanks for help in advance.

[Guest BeBunk]

For all who are interested, the court date has been postponed. We was already at the court house when we found out about it and our attorney was on his way....I thought you was at least supposed to let the other person', ATTORNEY know if you postponed...we didn't even get a letter or anything this time...............