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Can't get an answer from an attorney -Can someone assist?


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Can someone please help answer a few questions? Attorney offices keep pawning me off to other attorney offices and I"m getting nowhere. 

Husband was receiving an injury related retirement pension from the city he worked in. He elected me as the beneficiary after we were married. He had been divorced prior, and It was noted in the divorce decree that his wife was to receive half. She filed a joinder for the Plan Administrator, but a QDRO was never completed.  He passed away in December,  2018, but the city denied me his benefits due to their requirement of a 1 year waiting period and he died in month 9. ?  Ex wife is now filing a QDRO and will be requesting a judges signature in lieu of my husband's to proceed. I believe the Plan Administrator is cooperating with this. 

All I need to know is what my role is in this-- do I have any rights to contest that she receive anything or is this solely based on a judges decision? Do I need to submit/appear in court/have legal representation for anything?  The Ex mentioned something about me "signing off" on her filing.  If that's the case and I have the right as the official beneficiary to block this process, I'd want to offer her a split of the benefits to 'sign off' for approval.  The divorce was in CA. 

Thank you 

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Governmental entity pension rules may be (and often are) different, but in the private sector a ex-spouse has the ability to file a QDRO after the death of his/her ex. Also, the beneficiary of any survivor annuity is determined at the "annuity starting date" - when the pension payments started. If John is married to Jane when payments begin as a joint and survivor annuity, then Jane is the beneficiary of the survivor annuity, even if they divorce and he subsequently marries Jill. If you married after he already started receiving his pension, then you cannot be spousal beneficiary.

Plans are allowed to treat employees are unmarried until they have been married for one year, but this only impacts pre-retirement death benefits and a joint and survivor election at retirement, neither which seem to apply here.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services

kprell@bpas.com

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Thanks for your reply. He did start receiving his retirement benefit  (at age 40) during his previous marriage, although they were legally separated at the time.  When we married, he submitted an "election to provide a continuance to a spouse" which was accepted and filed with the Plan Administrator.  I know in many cases once a beneficiary is named, it cant be changed, but in this case it is permitted.  We were married over a year, but he procrastinated/forgot and submitted the ppwk 6 months after the marriage. That is the official date that started the 12 month waiting period.

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So I guess my question is again, do I have ANY clout at all in this scenario? And what is the likelihood that the Ex will be granted the benefits without a QDRO? 

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My sympathies for you situation and the losses you are experiencing.

Your situation pension benefits situation is complicated by several factors, including (1) the pre-retirement disability (2) starting while married to spouse #1.  But the most important factor for consideration in this forum is that the plan is a governmental plan, which means the the general national rules, applicable to private employers, that we are familiar with do not necessarily apply even though some concepts and principles may be similar.  Only an understanding of the terms of that specific plan and applicable rules or regulations for that specific plan will be the basis for any answers with certainty about where you stand.  It just will not work for you to provide a description here of circumstances within your purview and get a response that is specific and reliable.

CuseFan responded within the context of the law in the private sector and warned that government plans may be different.   That is about as good as it gets.

You have asserted your claim based on your marriage and the attempt to designate you as beneficiary.  That is what you had to do.  Usually there is an appeal process, but not necessarily.  Whether or not you got a correct or complete ruling/response can't be determined here.  As to whether or not you can get anything by being a nuisance to spouse#1 is likewise beyond this forum. 

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  • david rigby changed the title to Can't get an anwer from an attorney -Can someone assist?

I would definately contest and appeal the claim.  Regardless of when you're husband submitted the paperwork, the anniversay date of marriage is the same.  Legally, you were married for a year and if they previously approved the change and now are denying you on those grounds alone, you should definately fight the decision.  Honestly, they probably should not have approved the change and they are hoping you don't fight the issue.  Since his previous wife has an attorney, the company is more than likely trying to cut expenses hoping you do not fight it.  If the error was on their part and you have the paperwork to back it, then most judges and courts side with in the favor of the participant instead of the plan sponsor.  Good luck and so sorry for your loss.

 

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There are thousands of pension plans in the US and they are not all the same.  You need to tell us the name of the Plan and in what State your divorce was granted.  Furthermore, you are now dealing with survivor annuity benefits and not retirement benefits.  

A QDRO is a court Order incident to a divorce.  The Pension Protection Act of 2006 ("PPA") provided that a QDRO can be entered posthumously, but that normally applies only to ERISA qualified plan. ERISA is the Federal law that applies to "qualified" plans, mostly private companies.  Most state, county and municipal plans are not "qualified" under ERISA, but some are so the question is whether or not the Plan you are dealing with is subject to the PPA.

In most jurisdiction the entitlement to a survivor annuity terminates with the divorce but can be preserved/reinstated with a QDRO.  In some cases the election of a survivor annuity for a spouse before the divorce is not impacted by the divorce, but that's not always the case.   In some Plans survivor annuity benefits are available only to spouse and not to former spouses.  This is common in Plans applicable to police, firefighters and correctional officers.      

To make matters even more complicated, in some states survivor annuity benefits with respect to disability retirement benefits cannot be divided by a QDRO.  And in some states if you don't have the QDRO entered within a certain period after the divorce the court loses jurisdiction to do so.  In some states the judgment of divorce can reserve jurisdiction to enter a QDRO.  And in some states a QDRO is viewed as an enforcement tool, like an attachment or garnishment and there are not time limitations on when it can be entered.  

Bottom line, it is likely that if his former spouse was awarded his survivor annuity benefits in his previous divorce decree, and if that's the case she can get a QDRO entered and the Plan will honor it.   You comment about the former spouse receiving "50%" is unclear.  That may have referred to 50% of the marital portion of his retirement annuity, or a 50% joint and survivor annuity which provides for the former spouse to receive a survivor annuity equal to 50% of the amount of the retirement annuity being paid at  the time of his death. 

Sorry I cannot be more helpful, but these matters vary from plan to plan and from jurisdiction to jurisdiction and are very fact specific.  

    

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FMSINC This is helpful, thank you.  I  know there are a ton of details to consider and I appreciate whatever guidance I can get. You've provided more than any attorney has given me.  And I'm even willing to pay for their services!

This was a city retirement plan and is not subject to ERISA laws, and you are correct; it's a Law Enforcement Plan. I have all but given up on trying to fight them. They are not budging with their position:

<< The Fresno Municipal Code is very specific as to the time frames that must be adhered to.  This is not simply a policy issue that can be overturned by Retirement staff or Board.  The one year waiting period is outlined in Sec. 3-418(i).    Because Steven did not survive until the effective date of the benefit, no benefits are payable following his death.  Because the Code is not at all ambiguous in this matter, I do not feel there is any room to conclude anything other than what has been conveyed to you.  This matter has been discussed extensively with management in this office as well as the Retirement Board’s outside legal counsel.  The same conclusion has been reached following each of these conversations.>>

But in the Ex's court documents that she sent me, the city is '"completely willing to cooperate with signing off on the finalization of the QDRO" 

Jerks!  >:-{  

 I don't think we're dealing with survivor annuity benefits or if I play a role in that, either.  I'm not familiar with what that is. The Ex is petitioning for her "marital portion of his retirement". The divorce decree says she gets  "community property interest in retirement benefits with the city of Fresno".

But this is also in their divorce documents, which adds to the confusion.  FYI there was no will. 

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So again, if there's any reprieve for this grieving widow, I'd appreciate any advice. 

Thank you 

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For your purposes, "marital property" and "community property" are the same.   

I fear you are out of luck.  If the plan documents say there is a waiting period, then nothing the court says or the parties agree upon will make any difference.  Neither the court or the parties can supercede the plan document.  Entering a QDRO will not help.   It his case the plan documents look like they are in the local code and there is a one year waiting period for you to get survivor annuity benefits and he dies in 9 months.  Terrible, but there was nothing he could have done.  If he signed all the papers it would not have mattered since the 1 year waiting period was not satisfied.  So I fear you are just out of luck.   

The opposite is often true as well, that is, an ex wife  can waive her rights in a former spouse's survivor annuity, but if the parties were married at the time of the divorce, and if he had already elected survivor annuity benefits for her, she gets them even though they were intended to be waived.  

Unfortunately most lawyers and judges don't have a clue how these things work.   

You might check with them to see if they have any other form of death benefits other than a survivor annuity.   Some plans have a lump sum benefits for a spouse.

I will I had better news for you.   

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Oh, yeah, I know I've been shafted as far as any monetary compensation (except for the very smart decision on my part to have a spousal life insurance policy through my company benefits)    :-) 

I am wondering, though, if the Plan Administrators will accept his ex's QDRO submission..? 

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9 hours ago, fmsinc said:

A QDRO is for people who are divorced?  You were still married at the time of his death, right?  So there is no QDRO.  

I did not find the word "divorce" in IRC 414(p).

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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  • david rigby changed the title to Can't get an answer from an attorney -Can someone assist?
See 414(p)(1)(B):  

"The term “domestic relations order” means any judgment, decree, or order (including approval of a property settlement agreement) which—

(i) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and

(ii) is made pursuant to a State domestic relations law (including a community property law)."

A QDRO can be issued for the purposes of collecting child support  from a spouse or former spouse and that may or may not have involved a divorce.  A QDRO can be issued to the purpose of collecting alimony from a spouse or former spouse  and that must assuredly have involved a divorce proceeding at some point.  And a QDRO can be issued for the purposes of dividing marital property between the parties involved in a divorce proceeding.  

To dig a little deeper, here is Question 1-8 from the DOL ESBA 2014 The Division of Retirement. Benefits Through Qualified. Domestic Relations Orders Handbook - https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/qdros.pdf

"Must a domestic relations order be issued as part of a divorce proceeding to be a QDRO?

"No. A domestic relations order that provides for child support or recognizes marital property rights may be a QDRO, without regard to the existence of a divorce proceeding. Such an order, however, must be issued pursuant to state domestic relations law and create or recognize the rights of an individual who is an “alternate payee” (spouse, former spouse, child, or other dependent of a participant).

"An order issued in a probate proceeding begun after the death of the participant that purports to recognize an interest with respect to retirement benefits arising solely under state community property law, but that doesn’t relate to the dissolution of a marriage or recognition of support obligations, is not a QDRO because the proceeding does not relate to a legal separation, marital dissolution, or family support obligation.

"[ERISA § 206(d)(3)(B); IRC § 414(p)(1); Advisory Opinion 90-46A (Appendix A); see Egelhoff v. Egelhoff, 121 S.Ct. 1322, 149L. Ed. 2d 264 (2001); see Boggs v. Boggs, 520 U.S. 833, 117 S.Ct. 1754 (1997)]"

I am not aware of any state law that would authorize the entry of a QDRO for the purpose of transferring marital property between parties who are not in the process of obtaining a divorce.  In fact, the term "marital property" does not even exist in the absence of a divorce action. It means property acquired by the parties during their marriage that is now "on the table" for purposes of allocation by a court at the time of and in connection with a divorce, either by the entry of a marital or monetary or distributive award, or the entry of a QDRO. 

If you and/or your wife own a home, it will be titled as T/E or JTROS or T/C or titled to one party or the other, but a determination as to whether it is "marital property" is not made except in the context of a divorce.  And it may be marital property or not, or partially marital property.  And depending on the type of marital property it may or may not be subject to a QDRO designed to transfer such property from one party to the other, but at the end of the day it has to be done in accordance with State law.   

It is entirely possible for State law to prohibit the transfer of retirement assets from one party to another, and if that were the case, then no QDRO can issue.  414(p) describes and authorizes the issuance of a QDRO (and see the REA and the PPA of 2006) but it does not mandate the issuance of a QDRO. 

If you know a jurisdiction where the court can issue a QDRO transferring marital property between parties who are not in the process of divorcing, I would love to know about it.  I have been in practice for 52 years and preparing QDROs for 31 years and have not heard of that happening. 

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Can you tell me what exactly you see happen and in what context.  California is a "community property" state and I am a long way from there in Maryland where the term is "marital property" so I understand that there are differences, but I have for years read every case issued by every US court, state and Federal, with respect to QDROs and have yet to find a case in which a QDRO was issued dividing pension or retirement assets that was not connected to a divorce case.  I keep in mind that a QDRO is nothing more than an enforcement tool, like a garnishment or an attachment.  It facilitates ERISA.  

I took a look at the Shelstead case at - https://scholar.google.com/scholar_case?case=6231792219368013679&q=qdro+%26+divorce&hl=en&lr=lang_en&as_sdt=4,5,321,322,323,324&as_vis=1

Maybe we are talking about different things.  Let's say to have a happily married couple.  The husband, a Participant in a pension plan, dies.  Under ERISA his wife is entitled to a Qualified Joint and Survivor Annuity unless she waived her right to receive that benefit.  But her right to that benefit is not enforced by a QDRO.  That would be a case where retirement benefits are due, but not in a divorce context, and not enforced by a QDRO.  A lawsuit against the Plan Administrator will do it.  

There have been 148 cases decided by state and Federal Courts in California.  120 of them are captioned "In re: Marriage of XXX".  I have not tried to review all of the 28, but the 7 most recent cases that don't begin with "In re: the Marriage" are all from divorce cases.  

David     

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Well, as one who grew up in Silver Spring, hello from California.

I think you are looking for something that doesn't exist. All of what you are looking at involves litigation.  Most of what I'm discussing are cooperative filings.  There are no positions to litigate, nothing to be ruled against and therefore nothing to be appealed or reported.

One case involved something like the following.  Assume a fictional Mitt Romney had not elected Roth treatment on his IRA but still managed to turn a hefty profit of 100 mill or so.  Further assume he was married to somebody many years his junior.  As he approached 70 and 1/2 he was not looking forward to the 401a9 distributions.   Enter an order that assigned 99 million or so to his spouse. Poof. 401a9 distributions postponed.

Does the fact that California courts will rubber stamp cooperative post-nuptual arrangements render them non-QDRO's? Never seen a test case. 

 

 

 

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First of all, QDROs are under ERISA.  IRAs are not under ERISA.  The transfer of IRA account from one spouse to another is pursuant to IRC 408(d)(6) that provides: 

"(6) Transfer of account incident to divorce
The transfer of an individual’s interest in an individual retirement account or an individual retirement annuity to his spouse or former spouse under a divorce or separation instrument described in subparagraph (A) of section 71(b)(2) is not to be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest at the time of the transfer is to be treated as an individual retirement account of such spouse, and not of such individual. Thereafter such account or annuity for purposes of this subtitle is to be treated as maintained for the benefit of such spouse."

Most IRA custodians believe that a QDRO as defined in IRC 414(p) is NOT required to transfer IRA account balances from one spouse to the other.  See  the attached articles on the subject.   

Most IRA custodian have their own forms.  See attached sample from Vanguard. and T. Rowe Price. 

Notice that everywhere you look in the Code re: IRA accounts and on these forms the expectation is that the transfers are incident to a divorce.  Being incident to a divorce is what makes them not a taxable event.   

So you are right that QDROs are not used in connection with an IRA transfer.  But that has nothing to do with the use of a QDRO to transfer pension or retirement benefits under an ERISA qualified Plan. 

Furthermore, as I said above, the ability to make the transfer is a matter of State law.  In Maryland, Family Law Article, Section 8-203 , 8-204 and 8-205, make it clear that the Court does not have the authority to transfer pension and retirement account except in connection with and at the time of a judgment of absolute divorce or an annulment.   That's it.  If a happily married couple in Maryland wants to make a transfer of such assets outside of a divorce, either: (i) they cannot obtain a court order to do so; or, (ii) if they somehow fool some judge with no knowledge of his/her jurisdictional limitations to sign a Court Order, the transfer will be taxable to the account holder as income and a 10% premature withdrawal penalty will apply as well (unless the account holder is over and 59 and 1/2). 

Once again.  I will be happen to have some evidence that pension and retirement assets can be transferred without a QDRO or IRA transfer form and in contravention of state law, and in violation of the antialienation provisions of IRC 401(a)(13) with the exception for QDROs discussed in subparagraph B. 

IRA Division & Transfer Incident to Divorce.pdf IRA Transfer w-o Court Order.pdf Vanguard IRA Divorce #2.pdf T Rowe Price IRA DivorceTransfer Form.pdf

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I appreciate the detailed response. Not being a lawyer I'm not going to speculate as to how or if a technical failure results in negative tax consequences.  This happens so rarely I don't think the IRS has it on its radar to decide on compliance. 

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