QDRO that assigns a benefit that is now frozen

[Pension RC]

I am processing a the benefit of a participant who was employed since 1976 and is still employed. In 2000, he dot divorced and a QDRO was issued assigning the alternate payee a fraction of the participant's benefit. The numerator is the number of years of marriage and the denominator is the number of years that the participant was employed. The plan froze 1/1/2009. Although the QDRO doesn't spell it out, it seems logical to me that the denominator should only include service until the freeze date. If it included service after the freeze date, then the participant could cause the alternate payee's benefit to decrease by continuing to work. Does anyone have any experience/guidance pertaining to this?

Thanks!

[CADMT]

The numerator is the number of years of marriage and the denominator is the number of years that the participant was employed. The plan froze 1/1/2009. Although the QDRO doesn't spell it out, it seems logical to me that the denominator should only include service until the freeze date. If it included service after the freeze date, then the participant could cause the alternate payee's benefit to decrease by continuing to work. Does anyone have any experience/guidance pertaining to this?

Thanks!

The denominator should be the total service time. You did not say why or what froze regarding the plan. If the plan freezes because of some event specific to the plan then it may be that the participant's continued employment would not constitute service under the plan. However, I am presuming you mean the pension benefit froze. Even so, the coverature formula in the QDRO remains the same and is applied to the benefit that the participant receives at retirement. The marital property may be larger or smaller at the time of retirement/benefit commencement. The formula is the method to arrive at an equitable distribution of a future benefit with each party receivinig a proportionate share of the benefit. Consequently, unless the QDRO ordered a fixed amount or percentage, the formula has precedence.

[Mike Preston]

What CADMT said in fewer words: follow the terms of the QDRO. Period. It is not your job to tell the participant or the alternate payee that the way they drafted the QDRO is no longer necessarily consistent with their intent. I, for one, think that it is an entirely appropriate division in the circumstance you describe.