divorce after separation from service

[Gudgergirl]

Anyone encountered this situation?

DB Plan participant retires and startes receiving a joint and survivor annuity. He gets divorced. He wants to name a new person to receive the survivor portion of the annuity but is told by the Plan "No way."

Any assistance is appreciated.

[AndyH]

Check the document. It probably says that once the payment has started, it may not be changed. The QDRO cannot overrule the document or it is not valid.

[QDROphile]

"No way" is the answer that law intends and requires, ever since the 1980s. More recently, the courts have been concluding that a domestic relations order cannot intrude on the survivor annuity.

Maybe a different answer under a governmental plan.

[SoCalActuary]

The next step to consider is that the ex-spouse still has a right to those pension benefits. If you engage a pension actuary to value the relative worth of each pension benefit, participant's expected value liability and survivor's liability, then you can use that in dividing other marital assets.

[My 2 cents]

Remember that if the participant retires with his or her spouse as contingent annuitant, the spouse dies and the participant later remarries, the new spouse would have no survivorship rights, and the annuity payments would cease upon the death of the participant. No changes permitted in the identity of the contingent annuitant once payments start. The conversion factors are predicated on that fact. If the participant divorces after retirement, the annuity would continue to be a contingent annuitant form with the ex-spouse as the contingent annuitant. Once the payments start, it should be a permanent arrangement. Participant plus whoever was the contingent annuitant on the day that payments started, no changes permitted for any reason.

[david rigby]

Remember that if the participant retires with his or her spouse as contingent annuitant, the spouse dies and the participant later remarries, the new spouse would have no survivorship rights, and the annuity payments would cease upon the death of the participant. No changes permitted in the identity of the contingent annuitant once payments start. The conversion factors are predicated on that fact. If the participant divorces after retirement, the annuity would continue to be a contingent annuitant form with the ex-spouse as the contingent annuitant. Once the payments start, it should be a permanent arrangement. Participant plus whoever was the contingent annuitant on the day that payments started, no changes permitted for any reason.

Usually true, and certainly what is contemplated in the ERISA-defined J&S benefit. However, the plan can define additional optional forms of payment that might offer other flexibility (think, "pop-up"), subject to spousal signoff as appropriate. Thus, as AndyH says above, check the plan document.