Guest lindamichals Posted March 29, 2012 Share Posted March 29, 2012 If a QDRO is presented to an employer after the employee is terminated, account balance has not been paid out, does this release the employer from his obligation to process the QDRO? Link to comment Share on other sites More sharing options...
QDROphile Posted March 29, 2012 Share Posted March 29, 2012 QDROs are a plan obligation, not an employer obligation. Termination of employment is irrelevant, but it does make some timing issues more sensitive and difficult if the participant has the right to take a distribution in the middle of the QDRO processing. Link to comment Share on other sites More sharing options...
Guest lindamichals Posted March 29, 2012 Share Posted March 29, 2012 QDROs are a plan obligation, not an employer obligation. Termination of employment is irrelevant, but it does make some timing issues more sensitive and difficult if the participant has the right to take a distribution in the middle of the QDRO processing. So what you're saying is that if the employee requests a distribution, they employer has to oblige without the completion of the QDRO process? Link to comment Share on other sites More sharing options...
TPAMan Posted March 29, 2012 Share Posted March 29, 2012 Check the Plan's QDRO policy and procedure. Often times it may be necessary to freeze distributions on a participant account pending certification of the QDRO. Link to comment Share on other sites More sharing options...
BG5150 Posted March 29, 2012 Share Posted March 29, 2012 What does the plan's QDRO procedures say about the matter? Does the Plan Administrator freeze an account when it learns of a QDRO? Or actually receives a QDRO? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
ESOP Guy Posted March 29, 2012 Share Posted March 29, 2012 You need to read up on Stewart v. Thorpe Holding, 207 F.3d 1143 (24 EBC 1754) (9th Cir. 2000) You are going to want to read this from the DOL 2-11 http://www.dol.gov/ebsa/publications/qdros...#Administration Link to comment Share on other sites More sharing options...
Guest lindamichals Posted March 29, 2012 Share Posted March 29, 2012 You need to read up onStewart v. Thorpe Holding, 207 F.3d 1143 (24 EBC 1754) (9th Cir. 2000) You are going to want to read this from the DOL 2-11 http://www.dol.gov/ebsa/publications/qdros...#Administration Thank you, this answer's my question! Link to comment Share on other sites More sharing options...
QDROphile Posted March 29, 2012 Share Posted March 29, 2012 Sorry, never trust the Department of Labor on a QDRO question. Schoonmaker v. Employees Savings Plan of Amoco Corp. It would help if the Department of Labor read the statute, so don't make the same mistake. Fortunately, following the Department of Labor's position probably won't get you in trouble because the participant is unlikely to be harmed by a delay in distribution and asserting a breach of fiduciary duty will not be worth the trouble. The fiduciary is in another sort of trouble if the answer is not in the writtten QDRO procedures and you are in trouble if you don't at least see what the QDRO procedures say. Link to comment Share on other sites More sharing options...
david rigby Posted March 29, 2012 Share Posted March 29, 2012 QDROs are a plan obligation, not an employer obligation. Termination of employment is irrelevant, but it does make some timing issues more sensitive and difficult if the participant has the right to take a distribution in the middle of the QDRO processing. So what you're saying is that if the employee requests a distribution, they employer has to oblige without the completion of the QDRO process? NO, that is definitely not what QDROphile stated, nor implied. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
mbozek Posted March 29, 2012 Share Posted March 29, 2012 QDROs are a plan obligation, not an employer obligation. Termination of employment is irrelevant, but it does make some timing issues more sensitive and difficult if the participant has the right to take a distribution in the middle of the QDRO processing. So what you're saying is that if the employee requests a distribution, they employer has to oblige without the completion of the QDRO process? The Plan admin must check the plans QDRO procedure to determine if a distribution request must be held in suspense if the plan procedures provide that the Plan admin must review the DRO to determine if it is a QDRO. If the plan procedure provides that the plan admin may pay out distributions if a DRO has not been submitted at the time the request for distribution is received then the plan can pay benefits to the participant subject to the spouse requesting that the state divorce court order that the benefits be divided in divorce decree instead of a QDRO since a QDRO has no effect once benefits have been paid to the participant. mjb Link to comment Share on other sites More sharing options...
QDROphile Posted March 29, 2012 Share Posted March 29, 2012 Sorry for the statement that was so dense that it was opaque. Once a domestic relations order is received by the plan, the plan must protect the part of the benefit that would belong to the alternate payee if the domestic relations order is eventually determined to be qualified. Even if the order is determined not to be qualified, the alternate payee must be given a reasonable time to remedy the defect and the benefit must be protected in the mean time. It is often difficult to determine how much of the benefit should be protected. Subject to provisions in the written QDRO procedures to the contrary, if a domestic relations order has not been delivered to the plan, a participant's rights should not be restricted, even if the plan suspects that a domestic relations order is more or less on the way. This is the circumstance in which the Department of Labor position is at odds with the language of the statute and the court decision on the subject. If the plan has a domestic relations order in hand when the participant would have benefits commence, the Department of Labor guidance is not wrong about protecting the benefit for the would-be alternate payee pending determination of qualification. How that actually works under a pension plan at or after retirement age is an interesting question and the DOL is unhelpful. Link to comment Share on other sites More sharing options...
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