ex entitled to my pension won't sign QDRO

[lizz]

During our divorce settlement, my ex was granted $100K+ from my teaching pension when I retire.  Although the QDRO was drafted by an outside company specializing in QDROs, my ex refused to sign believing that he should receive more.  Both his lawyer and the mediator tried to get him to sign, but he refuses.  It's been 6 years and he still hasn't signed.  When I retire in a few years, if he hasn't signed it and submitted it to the County Judge, will he be entitled to the pension money?

[Mike Preston]

Obviously, this is a question for your divorce lawyer,  who has knowledge of how things work in your jurisdiction.  But, in general a pension  plan subject to ERISA will be precluded from paying him any portion of your pension unless  or until the DRO is signed by all parties necessary, submitted to the plan and, most importantly, accepted by the plan as a QDRO.

[Patricia Neal Jensen]

Had a situation in which the "refusing to sign" spouse died. The attorneys agreed that there was no QDRO and the total payout remained the property of the living employee spouse.

[Belgarath]

Start with Mike's advice to check with your divorce lawyer. Just curious - you say it is a teaching pension - is it a pension from a governmental (non-ERISA) employer, or from a private institution where the plan is subject to ERISA? Could make a difference.

[david rigby]

Has the draft been reviewed by the plan administrator?  The most common practice is to prepare a draft, and let the PA review, then get the court to sign.  While your local court procedures might require both parties to sign off, it's possible that putting a final version (along with the draft approved by the PA) in front of the court, might "spur" the Ex to add his signature.
 

[fmsinc]

I assumed that since you used the term QDRO you are dealing with an ERISA qualified plan and not using "QDRO" as a generic term for a retirement benefits order under a State, County, Municipal or international plan, most of which are NOT covered by ERISA.  But you said "teaching pension" and that raises two questions.  Most teacher plans are funded either by the county where you teach or by the State , and neither are normally ERISA qualified.  Second, a "pension" is what you get when you retire at a certain age with a certain number of years of service and income history, and is paid out monthly, and does not have an ascertainable value.  A "retirement plan" is akin to a 401(k) or a 403(b) and you can look at a statement and see how much is in the plan.  So I suspect that you are not talking about an ERISA qualified QDRO and are not talking about a "pension".  You can see how precision in language is so important in this area of the law.  And it's also important to know in what state's court system you are operating.  

There are a number of answers to your question: 

1.  If the Judgment of Divorce (incorporating your Settlement Agreement) contains all of the information that is required for an ERISA qualified  QDRO, then you don't need a QDRO and the Plan Administrator should accept a certified copy of the Judgment of Divorce (with the Settlement Agreement attached).  See the 2nd paragraph on page 4 of the DOL ESBA Handbook attached, or that can be downloaded at  https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/qdros.pdf

2.  In some states like Maryland, a QDRO or any other retirement allocation order need not be signed by the parties.  It is considered to be an enforcement tool like a garnishment or attachment.  See Rohrbeck v. Rohrbeck, 318 Md. 28, 566 A.2d 767 (1989).  The normal protocol is to file a Motion for Entry of Retirement Benefits Order.  It is quite bizarre in your case since your ex is the one to benefit from the receipt of the funds on deposit in your account.  And he may or may not be entitled to gains, losses or investment experience with respect to his share from the valuation date to the date his share is distributed to him.  See attached Memo.     

3.  If you die before an ERISA qualified  QDRO is approved by the plan administrator, the Plan will also be subject to the Pension Protection Act of 2006, and he can get a post mortem QDRO.  But if the Plan is not under ERISA, he cannot get a post mortem Order, your account balance will pass to your named beneficiary.   If you have not done so, you need to name a beneficiary.  If he is still named as the beneficiary of the account and you die, he will get it all.  Lots of Federal law on this.  If he dies first the question is whether his estate will be entitled to obtain a QDRO?  Maybe.    

4.  In some states there is a statute of limitations on the right of a party to obtain a QDRO.  If the Order is not submitted within the statutory time, the underly right to the QDRO is lost and collections cannot be enforced.  It's like a judgment that expires in 12 years in many states and cannot thereafter be collected unless it was renewed in the proper way.  

5.  In many cases, if the Judgment of Divorce does not contain a paragraph like this: 

"ORDERED, that this Court or another court of competent jurisdiction shall retain continuing jurisdiction for the purpose of awarding, entering, modifying, increasing, decreasing, amending, revising, explaining, interpreting, clarifying or vacating any Judgment or Order previously entered by this or such other court with respect to the allocation between the parties of all pension or retirement plan benefits, included defined benefit and defined contribution plan benefits, and including retirement annuity benefits and pre-retirement and post-retirement survivor annuity benefits or death benefits."

If that language is not in the Judgment of Divorce then the court loses jurisdiction after the expiration of time specified in the applicable court rule for the modification or court orders.  See, e.g. Leadroot v. Leadroot, 147 Md.App. 672, 810 A.2d 526 (2002), holding that in the absence of clear and convincing proof of fraud, mistake and irregularity per Maryland Rule 2-535(a), the Court did not have jurisdiction to issue an amended QDRO that revised the coverture fraction which everyone seemed to agree was a clear mistake by the trial judge in computation of the numerator.

Bottom line is that you need to find a lawyer iin your jurisdiction who is conversant with the law of your state as to this area of the law.   

David
 

 

QDRO Handbook.pdf Gains, Losses, Ownership Interest and Constructive Trust.pdf

[Mike Preston]

"... and is paid out monthly, and does not have an ascertainable value."

Not to be confused with "and does not have an actuarial value"??  Or have  you just made the case that the thousands, nee millions, of cases where a valuation of some sort has been used in the context of divorce are in error?

[fmsinc]

I was very specific in my comments.  Actuarial present values are often computed with respect to  "pension"/defined benefit plans.  I have never seen a court award $100,000 from a "pension" plan as set for in the original post in this email thread.   So, as I said, you cannot look at a Lockheed Martin "pension"/defined benefit plan and find a stated dollar value.  You can look at a Lockheed Martin "retirement"/defined contribution (ex: 401(k)) plan and see a hard value set forth.  

As far as actuaries are concerned, in order to compute a present value of a defined benefit/pension plan you need to assume a COLA rate that may or may not hold true over 20 or 30 years in the future. You need to assume a discount rate (ex: PBGC 4044) that will hold true for 20 or more years.  You need to assume the Participant's age at retirement (55, 60, 62, 65, 70)  - it makes a difference. You need to determine the Participant's life expectancy from tables that are one size fits all for the "generic" man or woman.  And you need to determine the number of years, if any, that the Alternate Payee will live in order to receive her share of the Participant's pension benefits.  Assume, assume assume, assume, assume = speculative.    

This speculation has caused many jurisdictions, including Maryland, to reject actuarial calculations of present value in favor of an "if, as and when" approach, that is, when the Participant starts to receive his/her pension benefits, the Alternate Payee will receive a share computed by taking 50% of the monthly benefit multiplied by a fraction, the numerator of which is the number of months during the marriage that the Participant accrued creditable service toward retirement, and the denominator of which is the number of months of creditable service accrued by the Participant at the time of retirement, a/k/a the "coverture fraction".   

Many years ago I represented a 55 year old Government employee, a GS 15, Step 10, at the top of the GS ladder.  His wife produced an actuary who testified that the present value of his pension was about $600,000, and the wife wanted the court to enter a judgment in her favor for $300,000 even though his retirement might be years away.  I asked the actuary what date of retirement he assumed and he said 65 and acknowledged that his calculation might not be correct if my client retired before or after age 65.  I then asked him about the actuarial tables he used and if there was a separate column for men and women.  He said "yes".  I asked him if there was a column for a 55 year old man who had history of 3 heart attacks, referring to my client.  He laughed and admitted that such a table did not exist and that the life expectancy tables are for the "generic" man or woman and had no application whatever to my client.  The judge in that case gave the wife an If, and and when award.    

In the next session of the Legislature they passed a law making if, and and when the default approach.    

And we haven't even talked about allocation of pension benefits on a separate interest annuity basis rather than a shared (if , as and when) basis, thereby avoiding most of the issues set forth above.  

And we have not discussed the fact that actuaries believe that if you put your right foot in ice water and your left foot in boiling water, on the average you are comfortable. 

David

[QDROphile]

So what do you think of the value of the Dept. of Labor QDRO Handbook that you have attached to at least one post?

[Mike Preston]

I would hope that somebody other than Mr. Goldberg who is familiar with Maryland's treatment of pensions in divorce could throw some serious shade on his interpretations.  It is hard for me to believe that the state I grew up in constructs their rules in such a misogynistic manner.

[Mike Preston]

I know it is a sophisticated path that the California courts have chosen when dealing with pensions in divorce.  Given Mr. Goldberg's lack of understanding of the purposes of simplest of actuarial calculations it is not hard for me to believe he has little familiarity with the subject. I actually hope, for his sake that he does have scant familiarity.  I encourage anybody who has an interest in the subject to find one of the original textbooks, which I reference here as was done in a 2014 reported case from the Court of Appeals for New Mexico: "Murray Projector, Valuation of Retirement Benefits in Marriage Dissolutions, 50 L.A. B. Bull. 229, 233-34 (Apr. 1975)."  Or any of the dozens of authoritative books published with similar names, including a Pension Answer Book with a recent publication date with a similar name.

To aid in crafting Mr. Goldberg's next and no doubt pithy response I offer: https://actuarialjokes.com

[stephen]

For a second I thought you were referring to this GOLDBERG! 

Goldberg's Epic Entrance

[Mike Preston]

45 minutes ago, stephen said:

For a second I thought you were referring to this GOLDBERG! 

Goldberg's Epic Entrance

LOL

[card]

On 3/14/2019 at 5:24 PM, fmsinc said:

Second, a "pension" is what you get when you retire at a certain age with a certain number of years of service and income history, and is paid out monthly, and does not have an ascertainable value.  A "retirement plan" is akin to a 401(k) or a 403(b) and you can look at a statement and see how much is in the plan. 

Just for clarity, ERISA regs define "pension" plans to include all retirement plans, defined benefit and defined contribution. (In contrast to "welfare" plans.) Perhaps the original poster was using the term in similar fashion.