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If the ex-spouse awarded benefits per a QDRO begins payment before the employee quits and becomes entitled to an early retirement subsidy, the ex-spouse gets no part of the subsidy later earned by the employee. The question is how much does the employee get by way of the early retirement subsidy?

Suppose A is the employee, A is age 50 as of the date of divorce when he had accrued benefits of $2,000/month at age 65. The QDRO awarded 1/2 of that to B, the ex-spouse. When A reaches age 55 and could then quit and qualify for early retirement, A continues working. When A turns age 55, B chooses to being taking her awarded $1,000/month at EE's age 65. The actuarial equivalent for taking 10 years early nets B a $620/month payout.

A year later, A takes early retirement and earns a 25% subsidy. From the time of divorce to retirement, A had accrued another $600/month at age 65. With the $1,000/month at age 65 that accrued to time of divorce and A was allowed to keep, A's total benefit when he quits (age 56) is $1,600/month at age 65. Obviously, the 25% subsidy applies to the $1,600/month at age 65, and A is entitled to that $400 early subsidy.

The question is whether A should also get additional early subsidy of $250/month (25% of the $1,000/per month at age 65 awarded to B)? This $250 is part of A's total benefits, and it was not awarded to B by the QDRO because B began withdrawal of her awarded benefits before A became entitled to the early retirement subsidy.

Should A's benefits be the total, less just what was awarded to B by the QDRO? Or does the plan save that $250/month subsidy, as a windfall to the plan, not having to pay it to A since that $250/month relates to benefits that have been awarded to someone other than A?

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