DB QDRO: what do you normally see?

[Blinky the 3-eyed Fish]

I was just curious what most people normally see with regard to DB QDRO's. Let's say a participant was married before joining a DB plan. He has X years of participation at date of dissolution. He has Y years left until he reaches the plan's normal retirement age. It's a final average pay plan, meaning his ultimate retirement benefit is based on his highest Z year average compensation.

I had always seen the alternate payee's benefit based on the average compensation and years of participation at the time of dissolution with no consideration of future increases in compensation or additional years of service.

However, I ran accross a situation recently where that wasn't the case. Instead the DRO accounted for any increases in compensation and the ultimate annuity paid to the alternate payee would increase correspondingly.

I don't work with many QDRO's so I was curious what others have seen?

[J Simmons]

I see them both ways.

I think your norm is more accurately dividing the assets accrued to date of divorce, from a domestic relations point of view. That's what the benefit would be if the employee quit employment as of the date of divorce.

However, later enhancements to pre-divorce accruals have been allowed by state divorce courts. For example, if the employee vests further in pre-divorce accruals by reason of post-divorce service, the ex-spouse is allowed the further vesting in Idaho (my state) per a state supreme court ruling.