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employee not liable for drop in spouse's interest in 401k plan after divorce

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AK supreme ct held that employee was not liable to spouse for drop in value of spouse's interest in 401k plan after spouse's share valued at 319k was segregated in separate account in 401k plan in 2007 pursuant to a property settlement agreement. After divorce AP disputed value of her share of employee's account. When spouse collected funds in 2009 value had declined by 116K and she asked trial court to order ex to make up the loss. Judge ruled in her favor but appeals ct reversed b/c after account was segregated, ex husband had no control over its value. Drop in value was due to AP failure to collect payment.

This case is a good reason why the AP's interest in a DC plan should be segregated as a separate interest as soon as DRO is recieved.



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