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DRO - Child Support Owed by Beneficiary


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I received a DRO from a state child support enforcement agency attempting to grab some death benefits from a plan that are payable to the participant's designated beneficiary.  Can a DRO attempting to assign benefits from a beneficiary (instead of a participant) be a QDRO?  Anyone dealt with this situation before? 

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Well, that's another way to look at it.  The purported "alternate payee" is the child of the beneficiary, not the participant.  So, this child would not technically be an alternate payee because he or she is not the child of the participant.  This may be a better basis to deny the DRO.  Thanks! 

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Don't the DOL rules limit alternate payees to a spouse, former spouse, child or other dependent of a participant?  Is it said anywhere that benefits payable to a beneficiary of a deceased participant (and this entire discussion is only possible if the participant is deceased) can be diverted to someone else for any reason?  Perhaps the plan MUST pay the death benefit to the beneficiary and the child support enforcement agency can do no better than to try to get at those funds once they have been paid to the beneficiary.

Always check with your actuary first!

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luissaha, if your ERISA-governed plan's provision closely follows ERISA section 206(d)(3) and Internal Revenue Code section 414(p), consider that the child-support agency's document not only might fail to meet the definition of a qualified domestic relations order but also might fail to meet the definition of a domestic relations order.  Get your lawyer's advice about those points, and about what procedure the plan's administrator might use in responding to the child-support agency.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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There may be some other similar discussions on this topic.  I suggest you Search (in this Forum only), using the terms "child support" or "agency".

This is just one example:

http://benefitslink.com/boards/index.php?/topic/57532-who-pays-taxes-for-kids/#comment-252778

 

 

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.

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I remember that thread.  I think that thread was mostly about whether one could honor an order to pay some of the participant's benefit to a child support agency on behalf of the participant's child.  I think that the answer to that question should be "yes" since it is for support of a dependent of the participant.  I think the answer here should be "no", since it does not appear that ERISA makes any provision for diverting pension benefits for the support of someone other than a spouse or dependent of the participant (or in rare instances tax liens on the participant).

Always check with your actuary first!

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