Amended QDRO

[Guest needhelp2]

Little history: My husband and I hired a lawyer(s) to have his ex-wife of 16 years be removed as the beneficiary of survivor benefits. We were definitely blessed because the judge granted DRO and after 2-3 submissions to the company (was told they never received it until third time) and hiring another lawyer to formulate the Amended QDRO ( It was deemed qualifed 3/2014 and active 6/2014) I know usually not ever heard of.. being able to win a case like this after 16 years. Here is the problem: From 2006-2014 his ex-wife would have been the surviving spouse if he had died. I would not have received a dime. NOW the company is making it retroactive to 2006 (early retirement) for his current wife (me) being the survivor and informing us we have to pay 1400 dollars even though if he would have died during the time frame, his ex-wife would have been the surviving spouse. Does anyone have any idea how we can get this fixed? Such as survivor benefit starting in 2014. The company is one of the big 3 American Auto industry. I do not know if I can be more specific of the company.

If you want more history, I wrote about it before and it would be in the forum under QDRO with my user name.

[My 2 cents]

Not a lawyer, but giving my thoughts anyway.

If there is something unheard of here, it is not that a QDRO is accepted after a significant amount of time has passed. It is that the plan is permitting changes to be made to an annuity benefit after payments have begun. Normally, the annuity form and the identity of the joint annuitant are considered to be irrevocable once payments have begun. Divorce almost never takes away from the ex-spouse the status as the joint annuitant under a participant's retirement benefit once payments have begun with the ex-spouse identified as the joint annuitant. It must be the case that the only way that this plan will permit such a change is to rework the benefit back to the date payments started and revise the monthly benefits accordingly.

The dollar amount of annuity payable under a joint form takes the ages of the participant and the joint annuitant into account. The younger the joint annuitant is relative to the participant, the smaller the appropriate monthly benefit. Using representative numbers pulled out of thin air, if the participant's benefit as a straight life annuity would be $1,000 per month and the participant retires under a joint form with a spouse the same age, the monthly benefit under the joint form might be $950 per month. If the participant retires under a joint form with a spouse 8 years younger, the monthly benefit under the joint form might be only $920 per month. I would expect from the fact that they are asking for money back that you are younger than the ex-wife. In that case, not only do they want $1,400 to be returned, but the amount payable every month thereafter will also be lower.

[david rigby]

Does anyone have any idea how we can get this fixed?

Get what fixed? I agree with previous comment: extremely unusual for a plan to permit changing a benefit once it has begun. However, it appears this plan allows it (although I can't imagine why the ex-wife would agree to it).

The method proposed (recalculate back to original payment date) is not the only valid method, but it appears to be the method defined in the plan. (No one reading this message board will have enough information to know the exact plan language.) It would not hurt if you asked the sponsoring company if the plan permits other method(s) that do not involve retroactive change (but don't hold your breath).

BTW, as I read your comments, it appears you don't have a choice: the QDRO has been done and accepted. What a pity someone did not consider this in advance.

[jpod]

It seems to me that the judge has no authority to order the plan to do this, but I suppose the plan felt that the path of least resistance would be to comply rather than litigate.

[Guest needhelp2]

Thank you for your responses. Ex-wife was one month younger than my husband and I am 2 years younger than him. I know it is unusual and she made a big mistake when she wrote a letter to our lawyer she would remove herself as the surviving spouse if Chuck would stop talking about the QDRO with his two stepsons (he claims them as sons) which are her 30 some years old kids. We had an excellent lawyer (he said he would not ever take an Amended QDRO case again lol). She had changed her mind and wanted to stay on as the surviving spouse, yet the judge basically told her she already was getting what she was suppose to get. I personally would not have signed the Amended QDRO until I spoke with a lawyer. She did not even bring representation. I was concerned the pension plan would not change it either because he was already receiving his pension. Maybe it had to do with him getting an early buy out? I don't know. I do know I read it in the plan, once retirement started then we were doomed, yet that was not the case.

I wish I would have seen your comments before my husband and I called the pension plan and told them our concerns and kinda demanding to know why we owed them the money. First we talked with someone in the pension department who could not understand it why we had to pay the money. She said either way with the ex-wifes and my birthday were considered 5 percent. Then she put us throught to the QDRO department and the representative was kinda arrogant. By the end of the conversation, I had said I needed to talk with our lawyer about this. Now I feel kinda foolish..I know this may sound stupid.. but can they reverse the QDRO because of us arguing with them about the money we will have to pay??? We are going to be sent the recalculation details in the mail and can file a claim, but from what I am reading it will be fruitless and a waste of time. We should just be happy the company allowed it to be qualified after retirement pension already had begun.

Argh.. I hope I did not screw anything up and it will be good to have the breakdown of how they calculated the amount owed. PLEASE tell me that this will not affect me being the survivor after all the work.. after being snotty to the arrogant young man who was in the QDRO department.

Thanks for all your responses! Greatly appreciated!!

[david rigby]

Yikes. There is implication in post #5 that the plan did this because the judge said so. Extremely important: no QDRO (and no judge) can tell the plan to pay something that is not permitted by the plan. But perhaps I misunderstand your phrasing.

(By the way, discussion about the children is irrelevant, and a distraction.)

[Guest needhelp2]

No the judge did not force her to sign the release of survivor benefits or tell the plan they had to make concessions. She signed off survivor benefits. There must be a clause in the Plan for this. Now I will have to locate the Plan and see it exactly says. I do know what I had read.. if she cancels herself from being the survivor then my husband could add me or it had a list of who he could add. Now I have to go check. I doubt this judge was "crooked". What could or would he get for making the Plan accept the QDRO? Maybe I just do not know what I am talking about or myself misinterpreted what I read? I definitely will be go back and read it over again. I believe when she voluntarily canceled herself as the beneficiary, that may have had something to do with it? Believe me, this company would not do anything that was not legal or do the extra work of changing beneficiaries unless the Plan allowed it. There must be some kind of stipulation. Could it be both lawyers (defendent and plaintiff) had agreed there was an error with the original QDRO?

[My 2 cents]

As indicated above, once the payments have begun, the identity of the person to be the joint annuitant is almost invariably locked in. Death of the joint annuitant or divorce would not change it. Perhaps, still subject to the survival of the originally designated joint annuity, arrangements can be made to divert the payments to someone else, but if the divorce was after the benefits commenced the survivor benefits would essentially belong to the original joint annuitant. It is even questionable whether the original joint annuitant could waive her interest in return for a greater assignment of marital assets, since that might violate the plan's prohibition against anticipation or alienation of benefits.

Did the divorce take place before or after payments began?

[Guest needhelp2]

Ex wife was not ever awarded survivor benefits. The divorce papers did not match up with QDRO. QDRO was done before divorce was even done and the splitting of marital assests. It clearly stated ex wife was to only get a portion with calculated percentage for the 9 years married and my husband had rights to everything else in regards to the Plan. The plaintiff and defendent lawyer made an error and all lawyers agreed it was an error and she was not entitled to survivor benefits according to the marital property document. It has been a big mess. The plan was not responsible to make sure the marital property division and the QDRO matched. Also in 1996 it was the state's law the alternate payee could not be the survivor. I wrote about it in the forum back in 2012 if you want more detailed info. It is too long to explain.

[My 2 cents]

Just to make the situation clearer in my mind, in what order did the following events take place:

• Divorce
• Benefit Commencement (described in the original post as 2006)
• Issuance of QDRO

Barring unusual circumstances, if the benefits commenced under a joint annuity naming the person to whom the participant was then married, establishing that spouse as the joint annuiant, it would be very unusual for the ex-spouse to be displaced as the joint annuitant by a court order related to a subsequent divorce. Most plans would treat the form of payment elected by the participant to be irrevocable and the joint annuitant's rights to survivor benefits under the form of payment elected to be fully vested as of the date payments began. Court orders in conjunction with a later divorce attempting to deprive her of those rights would usually be rejected by the plan administrator as not meeting the requirements for a QDRO.

[Guest needhelp2]

The divorce came first, she has been remarried several times since then. The original QDRO and marital property did not match and both lawyers agreed an error was made making her survivor beneficiary ( she was to receive only the calculation for 9 years married). We were married in 2006 and husband put me on as survivor. Did our Will found out she was named the survivor beneficiary. Hired 2 lawyers. One expert in QDRO's. In our state, alternate payee could not be named as beneficiary ( in the year of 1997) under the Plan. There were many errors on the original QDRO stated it was qualified in 1996 and in force and the divorce was not finalized until 1997. Everything was a mess from the beginning involving the divorce and QDRO. I just paid the money for overpayment and figure the Plan is right with calculations and be done with it. More than likely their re-calculations are right and we do not want half of a pension check because they can take 50 percent of his pension each month until paid off. Either way we are losing money. It is an unusual case and with all the evidence of errors with all parties involved and his wife signing off as survivor, the Plan allowed the change of beneficiaries. The funny part (sarcasm) is I could die before him and all this was done for nothing.

[My 2 cents]

In that case it makes a lot of sense to me that the action taken to correct the error involves going back and changing the form to have you as joint annuitant retroactive to the annuity starting date. If she was already the ex-spouse and there was no QDRO requiring her to be treated as the spouse for the Qualified Joint and Survivor Annuity (QJSA), then the original set-up was defective. You, as the spouse at the time that payments started, would have to have signed off to the contrary for it to not be set up as a QJSA with you as the joint annuitant. Therefore, the monthly benefits going back to 2006 would have been a little lower.

Are they going to report on this year's 1099-R tax reporting form your income from the annuity net of the amount you had to repay? You paid taxes on the higher-than-they-should-have-been monthly payments all of these years, so it would only be fair that the repayment will serve as an offset to the otherwise taxable income being paid this year. Ask explicitly about this.

[Guest needhelp2]

Thank you My 2 cents! That makes a lot of sense. I will let my husband know what you have written and esp. about the taxes.

[Guest sports]

I'm a new member, I wanted to start my own topic and cannot figure out how to do so, can anyone help it's also about MY QDRO. Thanks for any help

[Guest needhelp2]

Sign in, go to forums-find QDRO, at top of right side of page there is a black box.. I think it reads Start New Topic..click on it and that should get you to box to write a question. Hope this helps. Oh after you write your question or whatever.. click the Post button(black. Hope this helps.

[Guest sports]

Thanks... I posted..