QDRO for Child Support

[Guest QDRO crazy]

Can anyone please help me with any case law showing an Annuity plan paying out early for child support arrears? We filed FL-460 QDRO with Court, judge signed, served plan, but they are stating that the QDRO for support is a lien in that they will only pay when the participant applies for annuity. Looking at the plans rules and regulations for Carpenters Annuity Trust Fund for Northern California, they have written that benefits can only be paid at retirement and or if one of the ten categories is met. Looking under item H, it is written that a Qualified Domestic Relations Order is one of the categories.

Item 8. When may I or my Beneficiaries receive the money from my Individual

Account?

Because Defined Contribution Pension benefits can only be paid at retirement

or death, the money in your Individual Account may only be paid if one of the

following ten categories is met:

H. If You Have a Qualified Domestic Relations Order

If you are an Alternate Payee and have been awarded benefits under a

Qualified Domestic Relations Order, you may apply for your benefits as directed in that Qualified Domestic Relations Order.

Also the plans definition of a QDRO is as follows: Item 27. In rules and regulations.

27. What is a “Qualified Domestic Relations Order?”

A QDRO is a judgment, decree or order pursuant to state law relating to child

support, alimony, or marital property rights directing that all or part of a

Participant’s benefit be paid to an Alternate Payee. A QDRO must meet the

requirements of the Retirement Equity Act as set forth in 26 USC §414(p) and

29 USC §1056(d).

Why would the plan try to hold on to the money if a court order/ QDRO is in place, their own rules and guidelines show that a QDRO is 1 of 10 categories which allow the plan to pay out the monies early and their own definition of a QDRO includes child support?

I really need any case law showing that the plan should follow the QDRO and pay the child support arrears from the annuity fund- even before the participant applies for it.

[david rigby]

Since detailed legal advice from this website is worth just what you pay for it, you probably need advice from an attorney who is well-versed in QDRO's (if the attorney is not well-versed, keep looking).

Be aware that a QDRO cannot require a plan to pay benefits in a form not already authorized by the plan. For example, if a plan only pays monthly benefits, a QDRO cannot require a plan to pay a lump sum.

[QDROphile]

1. Union plans are inappropriately rigid in dealing with domestic relations orders.

2. Fitting child support into qualification requirements is not easy.

3. It would be almost impossible for you to give us give us enough information in this forum to determine if the plan position is inappropriate.

As david rigby suggests, the terms of the plan other than the terms dealing with QDROs may affect whether or not an order is qualified. Your post suggests that you are trying to get the plan to pay "early." It sounds like the plan will not let you do that, subject to section 414(p)(4) of the Internal Reveue Code.

[Guest QDRO crazy]

1. Union plans are inappropriately rigid in dealing with domestic relations orders.

2. Fitting child support into qualification requirements is not easy.

3. It would be almost impossible for you to give us give us enough information in this forum to determine if the plan position is inappropriate.

As david rigby suggests, the terms of the plan other than the terms dealing with QDROs may affect whether or not an order is qualified. Your post suggests that you are trying to get the plan to pay "early." It sounds like the plan will not let you do that, subject to section 414(p)(4) of the Internal Reveue Code.

The plan has conditions in which they can pay early and one is that the participant has not worked for more than 300 hours in A 24 month period. The participant has not but style plan now claims that participant must apply before funds can be distributed. It is one thing after the other with them. We now have a writ and interest rate of 20.43 per day. Another 7 k added since qdro was ordered. Seems like they would honor qdro as it is for back arrears but they keep throwing a wrench in the wheel. Can't wait until we get the case law and advertise to the general public how the laws were meant to read. It's as if we are writing the law as we go. All will work out in the end though. The truth will prevail.

[Guest EXTREMELYCONCERNED]

So glad that you posted again QDROCRAZY!

Have you ever thought that maybe acknowledging CHILD SUPPORT QDROS (ahead of retirement) may interfere with the Plan's investment objectives? If you think about it, maybe there is a reason that the Plans discriminate against child support QDRO before pay-status. Child Support QDRO's are unpredictable - they could show up at any time and take large amounts from the "pool" of assets. Perhaps this is why the Plans try to ward them off until retirement. This way, the 'projections' stay in tact. Your family may suffer, but the 'projections' prevail and the Plan wins in 'appreciation.' Is it just me, or does it seem that UNEXPECTED withdrawals or PAYOUTS could TANK the Plans???!!!

[david rigby]

ExtremelyConcerned:

you posted (essentially) the same message in multiple discussion threads yesterday. Perhaps you would like to elaborate? BTW, are you suggesting that the PA can ignore any responsibility of "acknowledging" of a QDRO in certain cases? Seems to me that's just part of the law and part of the PA's responsibility, but you might have some other thoughts to share.

[Guest EXTREMELYCONCERNED]

Thank you for responding. I posted in multiple threads because I am not sure which is "HOT" today.

I am saying that I know of a few cases, one case in particular, whereby the PA and the Plan have not only ignored the responsibility of acknowledging child support claims, the PA administrator actively took roles in preventing the potential AP from obtaining a so-called QDRO and stated that the AP would have to wait until the Participant retired or auto-pay status at 70 and one half years - although the Participant was past the earliest retirement age by a number of years. The Plan itself would not even release an annual statement for more than 10 years.

Now that it appears that there is a movement attempting to enforce CHILD support claims or CS QDROS, it appears readily apparent that this type of a QDRO appears to have DETRIMENTAL effects in the area of INVESTMENT PROJECTIONS. I simply believe it is worth a GANDER. After all child support claims are unpredictable, do not factor into the Plan's investment scheme and could create WIDE SCALE panic where such a Plan's assets and liabilities are neck and neck.

There appears to be a wealth of case law as it relates to property settlements and even spousal support. However, CHILD SUPPORT aspects of the REA appear to be one of the best kept secrets since enactment of the REA over 25 years ago.

PA's around the country do not know what to do with CHILD SUPPORT claims. Such claims appear to create shear HAVOC for some Plans. Just REALLY thinking through the sand and fog of it all.

[david rigby]

Yes, let's think it thru, with normal sized typeface please.

[Guest EXTREMELYCONCERNED]

Will do.

[ESOP Guy]

Extremely concerned:

Your suggestion that the motive has to do with asset investment and planning doesn't ring true. Take for example when you made that cliam on a union plan. Most of the union DB plans I have worked with (mostly on the 5500 side of things) have hundreds of millions of dollars in assets. A QDRO here or there just isn't material to the overall size of the assets.

[david rigby]

A QDRO here or there just isn't material to the overall size of the assets.

Generally true. However, it's possible he is thinking of a very small plan?

[Guest EXTREMELYCONCERNED]

Had I not personally witnessed a few of these actions by a particular plan and started inquiring across the country of others, I would not believe it myself. However, simple inquiries to other pension plan administrators yield the same result...Please hold - Can I have someone return your call - Can you call back in a week - Is the Participant in Pay Status?, Oh, not in pay status, well the child support cannot be paid until he retires - no pension benefits are available, Participant is not in pay-status...

The Plan would not disclose any information whatsoever, until it got caught violating ERISA disclosure requirements. Some of the Plan Administrators know nothing of the REA, but they do seem to know of QDRO's related to division of property pursuant to a divorce decree. It is baffling.

When I came across QDRO CRAZY's post, it made me think long and hard about the Plan that I know for certain had been thwarting potential child support AP's. I tried to identify a legitimate Plan motive and then found none for putting these particular people behind that kind of 8-ball, especially given the REA's expressed intent.

I wanted to get some other opinions on possible legitimacy, an expansion on savings to the Plan via shut-out of child support claims and/or the vigorous fight against those attempting to enforce CS claims against pension benefits. The only real case on the subject is Trustees of Directors Guild of America vs Tise, 234 F.3d 415; 2000 U.S. App. LEXIS 38507. Even that case identifies the Plan's knock-down, drag-out fight against the child support arrearage claimant.

What is the gain for the Plan in preventing the payment of child support claims before retirement if in fact other REA claims are paid before retirement?

I think there needs to be a healthy discussion of some sort is all. Big Plan, small plan, child support AP's seems to have decks of cards stacked against them. I merely wonder why.