QDRO payout dispute

[Pension RC]

We took over the administration of a profit sharing plan in 2011. A QDRO was written in 1987 awarding 50% of a participant's benefit to an alternate payee. In 1990, the participant was paid about $6,000, but the alternate payee received nothing. The participant subsequently passed away. Now the alternate payee is asking for her benefit. The plan sponsor claims that $6,000 was 100% of the benefit. We don't have sufficient document to prove whether $6,000 was 100% of the benefit or 50% of the benefit. In fact, we don't have any reports for the plan prior to 2003, so we can't really estimate what the participant's benefit was in 1990. She is threatening to get her attorney involved. Can anyone opine on what the outcome would be if she pursued this matter legally?

Thanks for any responses!

[SoCalActuary]

refer this to the plan sponsor's attorney, because they must defend the claim that they failed to follow the terms of the QDRO. If the plan sponsor says they paid 100% of the benefit, then they must confront the failure to follow the terms of the court. However, it would be better if they can prove that the non-participant spouse received their payment and a 1099 was issued.

[Belgarath]

A good example of why, when asked, "How long should we keep plan records?" we always tell them FOREVER!

[david rigby]

One thing the attorney will probably do is ask if the QDRO was ever delivered and/or acknowledged by the plan sponsor. Just saying it "was written" is insufficient. That's important because the sponsor cannot be accountable for following an order it never received.

[QDROphile]

The claim for payment of benefits should be prosecuted under the plan's claims procedures. Those procedures will inform who is to be adjudicating (probably the plan administrator) and how to proceed.