Order to pay child support

[Guest Sieve]

I assume you'd agree that an order to pay a child support arrearage to a division of the court would qualify as a QDRO even though payment under the order is to be made to the court division rather than directly to the alternate payee.

[PensionPro]

Yes, see DOL Advisory Opinion 2002-03A.

[QDROphile]

Depends on the terms and circumstances. But even if it fails as a QDRO, it might be permissible under other federal law. Search for some posts by mbozek, aka mjb, about 42 USC 666 and related state laws.

[mbozek]

I assume you'd agree that an order to pay a child support arrearage to a division of the court would qualify as a QDRO even though payment under the order is to be made to the court division rather than directly to the alternate payee.

If the order meets all of the requirements for a QDRO other than it is authorized by an adminisrative officer instead of judge then the order is valid as if it is a QDRO and the plan makes the check payable to the state agency. Under 42 USC 666(b) the check is paid to the state agency to reimburse it for making payments to the AP due to the failure of the employee to pay child support required under the divorce decree. Therefore the payments are owed to the state agency. Since the payment to the state agency is required under federal law the order issued by the agency under state law is not preempted by ERISA.

[K2retire]

I've heard Derrin Watson emphatically say that in NO circumstances could a QDRO AP be anyone other than the spouse or fromer spouse. Even if the QDRO was for child support and someone other than the former spouse (such as a grandparent) had custody of the children. Why is this different?

[mbozek]

I've heard Derrin Watson emphatically say that in NO circumstances could a QDRO AP be anyone other than the spouse or fromer spouse. Even if the QDRO was for child support and someone other than the former spouse (such as a grandparent) had custody of the children. Why is this different?

Because the DOL has determined that the state orders are domestic relations orders eligible to be approved as a QDRO by the plan administrator.

From DOL Opinion 2001-6A:

" It is the view of the Department that an income withholding notice issued by the DCSE (NY State Agency) or county child support enforcement agencies as part of the States IV-D program (under the Social Security Act) is a domestic relations order as defined in section 206(d)(3)(B)(ii) of ERISA. The notice relates to the provision of child support to a child of a participant in a pension plan, enforces a child support order that is made pursuant to State family or domestic relations law and is made by DCSE or a county child support enforcement agency, which have jurisdiction over child support matters. "

Derek should read Opinion letter 2002-03A cited above which determined that a QDRO can be approved if the state agency is named as payee because the state agency acts as the agent for the child in collecting and paying child support.

[My 2 cents]

Payments for a dependent child's support instead of to a spouse/ex-spouse are indisputably eligible for QDRO treatment. Any sort of domestic relations order pertaining to a dependent qualifies if the terms are satisfactory.

Who is Derrin Watson?

[david rigby]

Who is Derrin Watson?

http://benefitslink.com/modperl/qa.cgi?db=qa_who_is_employer

[Guest Sieve]

K2 -- This type of QDRO does not make anyone other than spouse, former spouse or kids the AP. It just directs payment to a state family law division, which the DOL says is acceptable.

[Laura Harrington]

I've heard Derrin Watson emphatically say that in NO circumstances could a QDRO AP be anyone other than the spouse or fromer spouse. Even if the QDRO was for child support and someone other than the former spouse (such as a grandparent) had custody of the children. Why is this different?

From IRC 414(p)(8):

414(p)(8) ALTERNATE PAYEE DEFINED. --The term "alternate payee" means any spouse, former spouse, child or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant.

[My 2 cents]

Some of us have learned to be a little bit careful as to what we allow ourselves to say emphatically.

However, I think the general consensus here is, emphatically, that children can be alternate payees under a qualified domestic relations order.

[mbozek]

I've heard Derrin Watson emphatically say that in NO circumstances could a QDRO AP be anyone other than the spouse or fromer spouse. Even if the QDRO was for child support and someone other than the former spouse (such as a grandparent) had custody of the children. Why is this different?

From IRC 414(p)(8):

414(p)(8) ALTERNATE PAYEE DEFINED. --The term "alternate payee" means any spouse, former spouse, child or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant.

Could you please explain the significance of the bolded language in your post. Its a mystery to me.

And could you also answer this question. 42 USC 666(b)(6)© provides that states enacting legislation requiring payment of back child support to a state agency under 42 USC 666(a) must hold the employer liable for amounts which the employer fails to withhold from the income due the employee following receipt of notice from the state agency. Since 42 USC 666 is a federal law state laws enacted to comply with its mandates are not preempted by ERISA (42 USC 666©(3)); therefore if a plan fails to withhold child support from an employee's pension because the state agency is not an alternate payee under IRC 414(p)(8) will the employer will be requiired to pay such amount to the state agency?

[My 2 cents]

There is no authority whatsoever to support the assertion that only a spouse or ex-spouse can be designated as alternate payee under a QDRO. The language from the Code that was bolded proves, indisputably, that an order that a plan make payments from a participant's benefits on behalf of children or other dependents can indeed be a QDRO if it meets the same sort of requirements that an order on behalf of a spouse or ex-spouse must meet to be a QDRO (i.e., doesn't increase the plan's liabilitiy, doesn't require payments be made at a time or form not otherwise permitted under the plan, contains adequate identifying information, etc.).

[Guest ggbrock]

Our position, based on all of the guidance noted above, is to make out the check to the Alternate Payee (I.e., name of child), c/o the child support agency. Also, make sure to include the identification number on the check.