QDRO: Entitled To Past Payments?

[NeedFacts]

I am so glad I finally found this forum! Let me start with my case background. I have a QDRO from a divorce dating back from 1992. I am the AP. I am from Tennessee. I had forgotten about it until recently discovering the certified letter in my files from X10 in Oak Ridge confirming that I had the QDRO in place. I immediately contacted them as it was incorrect in last name and address and so I updated it. Several months went by and they sent me some plan materials but nothing of real value. I contacted them again recently and asked for better information and they got back to me and stated I did not have a QDRO so I sent them a copy of their certified letter to me. Last week I got a letter in the mail that stated that pursuant to 414(p) of the IRS code, I was eligible to commence my portion of the pension beneft due my ex husband. And it was payable for my lifetime. They then asked for proof of age, some tax withholding and direct deposit paperwork. so they could get me on the monthly payroll cycle ASAP.  But then I had some questions for them. I asked if I die, does my benefit continue to a beneficiary? No they said. And if he dies, does it continue to me? Yes they said. But then the lady I am in contact with said that they had just located the QDRO documentation and they are checking with their Administrative Committee on past payments and how to proceed with that. She will keep me posted on further developments but wanted to get me into pay status as soon as possible since it may take a while to determine the past payments.

So, my questions are, will I somehow be getting past payments of monthly benefits that I should have gotten as a result of the company losing the QDRO and not attaching it to my ex's benefit before it was distributed? And where will that money come from if it is determined that I am entitled to it? He, I am sure is retired as he is on disability and has been for quite some time. I am unsure of his date of when he left the company as we do not communicate at all (really bad divorce). I did ask the lady I am in contact with in Benefits for the date of when I was eligible to start my benefits but she did not answer that question in my last email.

Also, should I get a copy of my QDRO with all this going on? I can't seem to find a copy in my paperwork.

I would appreciate any advice in this matter.

[ERISAAPPLE]

The courthouse should have a copy.  The plan should give you one too.  I would ask the plan first.  That is going to be your first step.  In fact, I would ask the plan for a copy of the QDRO and all correspondence to  you that it may still have regarding the QDRO. 

[NeedFacts]

I did ask for a copy of the QDRO today from the plan. I hadn't thought about any getting any correspondence that has been sent to me but you are right. I need to get that first since my name and address had changed during the years from the time it was finalized. I will do that.

[NeedFacts]

I have requested a copy of the QDRO, any and all correspondence sent to me regarding the QDRO from the time it was put in place and my date of eligibility(again) for benefits.

[NeedFacts]

Just got a copy of the QDRO from Benefits but I am having a hard time understanding the terms of it. Would someone take the time to give me their interpretation of it in everyday terminology? I'm curious especially what happens if: 1. I die first, can I designate a beneficiary to continue to get my benefit? 2. He dies first, does my ex's benefit portion revert to me? (he has since remarried, but I have read where some QDRO types override the current spouses with the AP as beneficiaries).

 

[JamesK]

On 6/5/2018 at 12:18 PM, LAHartline said:

"[W]ill I somehow be getting past payments of monthly benefits that I should have gotten as a result of the company losing the QDRO and not attaching it to my ex's benefit before it was distributed? And where will that money come from if it is determined that I am entitled to it?

To answer the simple questions, the plan will definitely be on the hook for payments that you should have received.  Data maintenance can be an issue - even for big companies - but I am still shocked that this has not been caught and corrected sooner.  The company should have recognized that your payments needed to commence when your ex-husband separated from employment or retired. 

The money will come from the plan's trust fund.  Whether they overpaid your ex-husband or not is not something we can know from the facts you've given.  If he was overpaid, it still won't affect your rights which are separate from his.  FYI, it is up to the trustee whether or not seek repayment from your ex for any overpayments, so I wouldn't worry about it. 

As you noted, the major issues are "when should payments have commenced" and "how much."   Based on paragraph IV.A., payments should have begun as of your ex's earliest retirement age or separation from service.  I would wait for the benefits department to get back with their interpretation and see whether it reconciles with the attached QDRO. 

The company should be able to document "how much."  That question is beyond the scope of what can usefully be covered in this forum. Any late payments should however be adjusted to provide you with interest from the date the payment should have been made.

Even though there is language about appointing a beneficiary, my best guess is that it relates only to your share in the two Savings Plans.  It would be very unusual for a defined benefit plan such as the Retirement Program Plan to allow for a joint annuity or a survivor annuity for an alternate payee.  You can ask but be aware that, even if you can, it will reduce the monthly amount you will receive.

[NeedFacts]

Thank you for your response. I really appreciate it. I am shocked too that it wasn't caught before now. Evidently I have triggered all of this when I changed my name and address and they had to go searching for it. Supposedly they had to go back and look in their archived paper files or that was what I was told at least.

I wish I knew when the benefit payments should have commenced so that I can see how much money is involved here. I have requested my eligibility date several times now but they have not provided it to me yet. I don't know when my ex's earliest retirement age is, but I do know that he started working there at age 18 and he is now 63 and the 'magic number' you have to have of combined company service and age to retire is either 80 or 85 I can't remember.

I'm glad to hear that the money will come from the plan's trust fund. Let them deal with my Ex. Fine with me. I am so thankful for the lawyer who put this QDRO in place for me. They were really looking out for my best interests. I will wait for the Admin Committee to make their decision and go from there. I do have a lawyer friend on standby if I will be needing her just in case.

Are there any other documents/information that I need to get from the Plan Administrator?

[JamesK]

You might want copies of any parts of the Plan that deal with the QDRO approval, distributions, and, if you think it worthwhile, beneficiaries.  You should also obtain a copy of the Summary Plan Description and the QDRO Policy Statement. 

Thanks for sharing your question.  There are a lot of large companies cleaning up their pension data to make sure that they have all the information necessary to calculate benefits and commence payments to participants and beneficiaries.  It sounds like that that's how Martin Marietta identified you. 

[NeedFacts]

I'll check into those documents thank you for suggesting those.

You all may find this rather interesting. I am a spreadsheet guru and I couldn't help myself so I setup a spreadsheet with what I have of known criteria on age and dates and backed in some formulas and such on my ex to do a calculation on when he reached the magic number of 85/company combined points of company service and age. I do know he was 25 when we got married so I know that date and I know he was 18 when he started with the company. And I know that he is now 63. According to my spreadsheet he reached the 85 points in the 2005-2006 time frame. We are talking some major $$$ here. No wonder the Admin Committee is going to take a while to make their decision to pay me the back wages on my benefit. I really had no idea.

[JamesK]

1 hour ago, LAHartline said:

According to my spreadsheet he reached the 85 points in the 2005-2006 time frame. We are talking some major $$$ here. No wonder the Admin Committee is going to take a while to make their decision to pay me the back wages on my benefit.

Wait and see what they come back with.  I hope it is good news.  

[Mike Preston]

I'm glad the system is working.  It has no doubt helped that you are so detail oriented.

[NeedFacts]

Well no SPD as requested from the PA yet. But I can't believe it but I did manage to find an old one in my files that belonged to my ex-husband. It's dated 1989 but it does have some important info in it. I wasn't too far off in my spreadsheet from the dates I calculated on his company service. Can someone tell me why he has a company service date of 2/15/75 and a credited service date of 11/25/74? BTW I have also contacted ERISA to have a benefits advisor contact me concerning this issue of my QDRO. I wanted to make them aware of the situation and to see if I needed to be doing anything else before the Admin Committee makes a decision on my back benefits. I'm not concerned so much with who pays my benefits just that it gets paid and rightly so. And my rights to my document access. I will let you know what happens with that.

[JamesK]

On 6/17/2018 at 7:02 AM, LAHartline said:

Can someone tell me why he has a company service date of 2/15/75 and a credited service date of 11/25/74?

I would need to see the definitions of those terms before I could provide a good answer.  The earlier date might be the date he started work for MM and the later date might be the date he began to accrue service credits under the plan (i.e., his entry date).  Usually one year of service is required but some employers have shorter periods.  Just guesses though.

[NeedFacts]

That would make sense. Thanks for the insight on it. I did hear from the ERISA benefits advisor today. She told me to formally send a written certified letter requesting the documents I wanted from the PA. She also told me after I gave her all the background on my case to let the Admin Committee hand down their decision and go from there. She said to contact ERISA again if their decision was not in my favor and to get a lawyer at that point. Do I have the right to ask if they ever attached the QDRO to his benefit plan and actually set aside my benefits from his at the time it was finalized according to their fiduciary duties? And do I have the right to ask for access to the information that the Admin Committee has for the agenda/pending decision about me and my benefits? I just want to know what I am up against here. All that information would be relative if the decision involves my entitlement to the back benefits and the amount or if it is about my ex-husband and collecting the overpaid benefits from him, or if they are just trying to decide where the back benefits will be paid from, etc.

[JamesK]

You can ask for anything.  Since you are an alternate payee or beneficiary, my best guess is that they would be required to provide most or all of that information to you.  It's impossible to say in the abstract though. 

I am not clear on the concern about whether the QDRO was "attached" to your former spouse's benefit.  Obviously it should have been noted in their records.  But again, since you should ultimately receive everything you are entitled to, is it relevant for your purposes?  

The Administrative Committee's decision will be communicated to you in writing and should state what evidence was considered in reaching their decision.  If you are not satisfied with the Committee's decision, then you should be able to see everything that they were looking at when the decision was made.  That way you will know if there is any missing or incorrect information or if the QDRO was not properly applied. 

What seems most relevant to me is any information that went into to determining your ex's benefit, the starting date for payment of those benefits, your share or separate interest in those benefits, and, if payments were not made in a timely fashion, how the make-up payments will be calculated.  As discussed earlier, I don't see how your benefits will be affected by payments made to your ex (but I suppose you can cross that bridge when you get to it).  

I should also mention that the Pension Rights Center might be an option for legal representation.  They recently initiated a project on how to simplify QDROs.  Here is a link to their website:

http://www.pensionrights.org/ 

[NeedFacts]

Thank you so much for your response/insight. Based on what you are telling me, I will move forward and just ask for all of it in my written request for information. What the heck...all they can do is say no if any of it is not allowed. I, personally, don't think they have certain documents for me to request since the QDRO wasn't attached to my benefits in the first place. The paper trail will show that.

One interesting side note. I had an epiphany the other day. I remembered having some important papers stored away and when I went and found them, I found a report called, '1989 Benefits Report'  and a pay stub for my ex. Evidently I had kept them when I shredded all prior records from my marriage. Would this be an SPD? It also stated that the Pension plan is a 'defined benefit' plan. And it reaffirms when benefits are payable: when age and service equals 85, or at age 62 with 10 years company service. Or reduced benefits payable after age 50 with 10 years of service. He may have been given a total disability though at some point in time. But it lists amounts for Disability Benefits, Survivor Benefits, Retirement Benefits, Pension Plan Accrued and Vested Benefits, Etc.  

From what you are saying, it sounds like I should just wait for the Admin Committee's decision to be handed down as it will explain a lot at that time and I will then will be able to move forward if I need to. Funny that you sent me that link. I had already contacted them yesterday and I have an appointment set up with their pension lawyer in about a week. But thank you for that as it just reaffirms that I am going down the correct path.

As an FYI, I did find yesterday on the internet a case that might affect me where the sister plant of Y12 in Oak Ridge sued a Participant for collection of over payment of his back benefits which was a result of a miscalculation and therefore caused the AP to not receive a large enough benefit. Even though the cause is not the same as mine, the end result is. And the judge ruled in favor of Benefits/Y12 to collect the back benefits from him. My concern is that I will be dragged back into court by my ex-husband if they go after him for the back benefits. I wouldn't be surprised if he tried to do that by reopening the QDRO to recoup his loses here. He is very capable of doing that if I look at his track record with me. I had to fight for 3 long hard years to get just the half of what I was entitled to by law. He gets the award for frivolous court filings. I guess I am just trying to anticipate what is going to be coming at me in the near future if that is possible.

Again, I truly appreciate your help in my situation.

I've attached the aforementioned court case if you want to take a look at it.

USCOURTS-tned-3_05-cv-00588-0.pdf

[Pension Dork]

(Long-time listener, first-time caller....)

We don't have the plan document, the final QDRO, or the age when the ex started his benefits.

Many DB QDROs I've worked with do not require the Alternate Payee to commence payment at the same time as the employee.  For example, you may not be required to commence your payments until his Normal Retirement Date, so if he took early retirement at age 62, it doesn't affect you.  It's wrong to assume you will be eligible for payments based on when he started his. 

When the QDRO was finalized, the Plan would have calculated his benefit at Normal Retirement Date and then applied the specifics in your QDRO to calculate your piece of that benefit. 

Just wanted you to be prepared in the event of this possibility.  Good luck to you. 

 

[JamesK]

Please do pay attention to Pension Dork's comment as his or her points are important.  You should indeed confirm the date on which your benefit should have started.  That may or may not be related to your ex's starting date.  

Looking again at your QDRO, Paragraph II.B. states that the pension benefit is your sole and exclusive property.  This means you have a "separate interest" in your ex's benefit (as opposed to a "shared interest").  Since your interest is separate from his, he would seem to have no reason to involve you in any matter involving collection of any overpayment.  There are limits to when someone can involve another in a lawsuit and penalties for suing people who are uninvolved.   

[NeedFacts]

Thank you Pension Dork and JamesK for your comments. I hadn't considered those points. I will keep all of that in mind. I sent a certified letter today to the PA requesting the SPD, plan document, the date when my benefits should have started, how they calculated my benefits, any correspondence that should have went to me under my old name and address, anything concerning me that the Admin Committee is using to make their decision about my back benefits.

Thank you JamesK for pointing out that paragraph in my QDRO. That certainly makes me feel better about the situation. And it makes sense too. I am just hopeful that the Admin Committee's decision goes in my favor. I will keep you updated.

 

[NeedFacts]

I have an update for you. Today I received from Benefit Plans the documents I requested in writing and from a discovery standpoint, I have to deduce that there was nothing sent to my previous name and address on file beyond the certified letter I got from them initially notifying me of the QDRO.  They did include a letter with a decision from the Administrative Committee stating that I am now entitled to back benefits dating back to when my ex-husband retired on 1/2009 which also includes interest. They included, as I requested, a spreadsheet of how they calculated my benefits as well as the interest. I had my tax advisor look at the calculations and she said it looked good to her so I am pleased with it. Thanks for everyone's help. Now what happens if and when Benefits decides to go after my Ex for the back benefits is between them. Not my problem at this point.

[Mike Preston]

Nice to see an example of the system, albeit delayed, working well.

[NeedFacts]

I have a new question related to my QDRO back benefit entitlement and current distribution. Do I have to take it now or can I delay my claim? Can I just let it sit there for now? The reason is that I am on LTD and if I could delay getting it for a few years, I wouldn't have to offset it with what I get from my LTD. I am 62 now. I'm thinking it would be better if I could do that.

[JamesK]

The QDRO does not have much to say about your right to commence or defer payments.  The only relevant provision that I see provides that:

"Payment of retirement benefits as provided herein may be made to the Alternate Payee before, or, or after earliest retirement age or separation from service of Participant."  Par. IV.A.

This seems to give you some control over the commencement of the benefits.  The Plan document may have some additional language spelling out your rights with respect to this question.  If the LTD is coming from MM, then there may (or may not) be provisions coordinating those benefits.  If you are able to defer payments, then the monthly amount of your benefit presumably will increase.  

Without all the information, I don't think I can offer much more help than this.  Try contacting the Benefits Department for clarification on your options regarding commencement of benefits.

[NeedFacts]

Thank you. Yes I have some concerns of them coordinating and thereby reducing my LTD benefit as a result of the QDRO. I was thinking that I need to defer it until I stop the LTD and start Social Security at 65. Would you surmise that they would hold my entire back benefits until then including the lump sum also if I deferred my benefit distribution? I have attached the Plan document that they sent me when I requested it. Would you mind taking a look at it for me and tell me what you think?

BTW, I did notice at 12.11 on the plan document as stated, that they will be going after my ex for the over payment of the benefit to him.

ORNL Pension Plan (PPA Cycle E Restatement).pdf

[JamesK]

I think you have to view this in two parts.  First, the Plan might provide that benefit payments may not commence until you have made an election to commence payments.  If that is the case, then there are no late payments and no added interest.  After that is determined, only then would you need to be concerned about back payments and interest. 

Back payments are almost always made in lump sum although there is a possibility that the Plan could recalculate the annuity from a new annuity starting date.  This assumes that your payments would have begun at some point in the past.  But our most recent posts imply that you had an election when to commence payments.

This in turn raises the question about the Plan's failure to provide you with any notice for commencement of payments.  Off the top of my head, I am not sure how they would correct that other than to provide you with a lump sum for missed payments.  If you elect to commence, for example, when you attain age 65, then there would seem to be no missed payments. 

I suspect that MM will work with you to provide your benefits and whatever options can be provided at this date.  

None of this answers the LTD offset question.  You'll have to obtain guidance from MM's benefits department for that.  I doubt the Plan offers the AP a disability pension so that may work in your favor regarding the offset question.