The fun just never ends!

[SMB]

Husband and wife worked for the same employer. Wife quits. Husband mentions to the employer that he and his wife "may" be getting divorced. Wife wants a distribution of her PSP balance. Nothing "official" yet as to any divorce. In fact, the husband and wife still reside in their home - just in different parts thereof. Employer suspects they can't "afford" to get divorced.

Any liability to the Plan if a distribution is made to the wife of her vested balance? Would obtaining the husband's acknowledgement and approval be waranted?

Anybody been down this road?

Thanks!

[QDROphile]

I think there have been various related posts. The answer depends on the facts and the terms of the plan and the plan's written QDRO procedures. Your facts point out the shallow thinking behind the Department of Labor's informal position on the subject -- that the plan adminisitrator has to take precautions to protect a would-be alternate payee's potential interest in the plan based on informal information about the possibility of a QDRO someday. P.S. The DOL position is legally wrong if you tally the court rulings on the subject.

[SMB]

QDROphile,

Thanks for the input. Sounds like a "logical" approach to me, although I've been in the business long enough to know that "logic" does not always enter into the equation!

SmB

[david rigby]

IRC 414(p) does not contain "divorce" or "separated". As such, neither is required for a DRO to be considered as a QDRO.

QDROphile's advice is on target: look to the plan's provisions and QDRO procedures.

[Guest Sieve]

FWIW, here is what Corbel's QDRO procedures say (in the interest of flexibility, apparently):

Procedure prior to receipt of order: The Plan will apply the following procedure prior to the Plan's receipt of a Domestic Relations Order.

1.

Suspension of Participant distributions or loans.

If the Plan Administrator is on notice (verbal or written) regarding a pending domestic relations action (e.g., a divorce) and has a reasonable belief the Participant's account may become subject to a QDRO, the Plan Administrator may suspend processing the Participant's distribution or loan requests pending resolution.

2.

Removing hold on the account.

After placing a hold on the account, the Plan Administrator should notify the Participant of the hold on the account. In order to remove the hold, the Plan Administrator should request the Participant to provide written confirmation that a court will not issue a QDRO with respect to the account; such as a property settlement agreement awarding the entire account to the Participant.