Definition of "retirement" under ERISA or REA

[fmsinc]

Participant's employment is terminated.  He does not apply to for his pension annuity benefits, that is, to enter payout status?

Has he "retired"? 

Does it matter if he has or has not reached early retirement age of 55 at the time of termination.  

I have an Hopkins v. AT&T situation (see link to case below) where at the time of divorce the husband had terminated his employment and had previously elected his wife to receive his survivor annuity benefits, but the court did not award her survivor annuity benefits.  Under Hopkins retirement prior to divorce would lock ex-wife into survivor annuity benefits.  

Wife's attorney says that his termination of employment was tantamount to retirement and locked in the wife as survivor beneficiary per Hopkins.  Husband's attorney say termination and retirement are two different things and he has not yet retired and since the court did not award survivor annuity benefits to the wife she doesn't get them. 

I cannot find a clear definition of what "retirement" means.  

Hopkins can be found at https://scholar.google.com/scholar_case?case=9954117838131396049&q=hopkins+v+at+%26+t+global+information+solutions+co&hl=en&lr=lang_en&as_sdt=20003&as_vis=1

Thanks.  

[QDROphile]

This is not going to help much.  There is no definition of retirement.  This comes up most frequently with respect to required distributions in situations where there is some wisp of employment that really should not thwart the policy behind the requirements, often in professional firms where the person is really self employed and the "employer" has not real interest in the employment status.

But you are looking in a QDRO situation.  I always thought AT&T v Hopkins was a crock (and so did the editors of the ERISA Litigation Reporter), until I was convinced by a Ninth Circuit case* (or at least conceded to its argument that at least made sense and Hopkins did not) .  That case argued that in the "let's get Reagan re-elected" rules for the benefit of women, there is a tension between the QDRO rules and the QJSA rules, both relating to spouses and defined benefits.  The point was not the definition of retirement.  The decision resolved the tension in favor of the result in Hopkins, saying that the congressional intent tipped in favor of the QJSA  spouse over the QDRO spouse in a close call. So be it.  To me, that underlines that the rights of the current spouse are not "locked" until the benefit starts, which is when the QJSA is triggered.  The QJSA is is not triggered at either termination of employment or attainment of retirement age.  The QJSA benefits the person who is the spouse at the time the benefit starts.  That could be the third spouse after termination of employment as far as the plan is concerned.  The inquiry at the start of benefits is (1) is the participant married?, and (2) who is the spouse NOW who can consent to the form of benefit?  That is also true under the bad terminology and incomplete thinking of Hopkins.  The federal rules, unlike state domestic relations law, does not care who is the spouse when the benefits are accrued.  Arguing that the spouse at the time of termination is "locked" is based (imperfectly) on the idea of when the benefits accrue relative to the marriage. 

*I thought Tise, but I looked and it was not; it was probably post-Tise.

[fmsinc]

You can find all of the cases citing Hopkins at 

https://scholar.google.com/scholar?start=0&q=%22Hopkins+v.+AT%26T%22&hl=en&as_sdt=20000006

I think you are referring to Carmona at https://scholar.google.com/scholar_case?case=18397822866838499359&q=%22Hopkins+v.+AT%26T%22&hl=en&as_sdt=20000006

The closest I got to a definition of "retirement" was a sentence in REA dealing with "early retirement" where that phrase was followed by "and apply for benefits". 

The actual language was: ""(3) EARUEST RETIREMENT AGE.—The term 'earliest retirement age' means the earliest date on which, under the plan, the participant could elect to receive retirement benefits."

Your views are very helpful.  Thank you.  

[Tom Poje]

according to the folks at social security (page 5 of their handout)

In 2019, a person younger than full retirement age for the entire year is considered retired if monthly earnings are $1,470 or less. 

 I don't think it mentions what happens if you are past full retirement age, but this is what they consider 'retired' before then but what the heck.

how work affects your benefits.pdf

[david rigby]

As implied by QDROphile, the origin of "retirement" is similar to other items (such as "working", or "terminated") in that early statutes/regs/common language assumed a "binary" relationship.  For example, in most cases, when you severed employment at or beyond retirement age, it was also assumed your retirement benefits commenced at that time, and "working while receiving" was very uncommon. 

IMHO, if possible, avoid terms that might be confusing; instead use terms such as "severance of employment", "benefit commencement date", etc.   While the original post might be stuck with its existing terms, maybe the response can focus on more accurate words.  You might point out that "eligibility for retirement benefits" is not identical to "electing a benefit commencement date".

[fmsinc]

Many thanks to all for you insightful thought on this problem case. 

David

[Bob the Swimmer]

Wonder, does the plan define retirement and termination ?

[fmsinc]

They refer to "retirement", but don't define what it is.  It has always been my impression that retirement occurs when you enter pay status.  Take a look Hubbard v. OPM, 247 F.3d 1236 (Fed.Cir. 2001) - a case that dealt with an Employee under CSRS.  In this case the parties divorced and an appropriate COAP was prepared and forwarded to and approved by OPM.  It contained standard provision setting forth the Former Spouse’s entitlement to a survivor annuity at the time of the Employee’s death.  Mr. Hubbard left his employment with the Federal Government but did not apply for retirement benefits.  He died and his Former Spouse applied for survivor annuity benefits.  OPM denied her claim holding that since, at the time of his death, Mr. Hubbard was no longer an “employee” or an “annuitant”, no survivor annuity benefits could be paid his Former Spouse.  The Court relied on 5 U.S.C. §8341(h)(1).  

CSRS is not under ERISA, but it does show that OPM and the statute quotes drew a distinction between leaving one's job and actually applying for retirement benefits.  This issue no longer exists under FERS. 

The CSRS statute, 5 U.S.C. §8341(h)(1) says: 

         “(h)(1) Subject to paragraphs (2) through (5) of this subsection, a former spouse of a deceased employee, Member, annuitant, or former Member who was separated from the service with title to a deferred annuity under section 8338(b) of this title is entitled to a survivor annuity under this subsection, if and to the extent expressly provided for in an election under section 8339(j)(3) of this title, or in the terms of any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such decree.”

But 5 USC §8445(a) relating to FERS says:

        “(a) Subject to subsections (b) through (e), a former spouse of a deceased employee, Member, or annuitant (or of a former employee or Member who dies after having separated from the service with title to a deferred annuity under section 8413 but before having established a valid claim for annuity) is entitled to an annuity under this section, if and to the extent expressly provided for in an election under section 8417(b), or in the terms of any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such decree.”
 

David

[Larry Gagnon]

I just skimmed Hopkins and believe it clearly correct. Why did QDROphile think it was a "crock"? Unless I misread Hopkins, ex-wife was awarded alimony upon divorce but no interest in pension of husband. Thereafter, husband terminated employment AND started receiving his pension in the form of a JSA with current wife. Husband fell well behind on alimony payments. Ex-wife obtained additional court order (QDRO-esq) which allowed her to be assigned a portion of stream of payments to ex-husband in order to pay down alimony deficit AND the duty of ATT to reform the JSA to make her the beneficiary of a JSA. Of course, unless she was born the same day as the new wife, such a reformation would make all the prior payments inconsistent with the reformed JSA. Ex-wife was ultimately allowed portion of stream of payments to ex-husband but NOT allowed to become ex-post-facto JSA beneficiary. IMHO, perfect result.    

To FMSINC: In Hopkins, court uses "retirement" to mean annuity has started. Hopkins is clearly inconsistent with any argument that quitting a job means prior spouse must enjoy JSA. Otherwise, Hopkins ex-wife would have won both halves of her request. Any contrary thoughts appreciated. Did I misread Hopkins?

[fmsinc]

I read Hopkins the same way, but I was looking for someplace in ERISA or the REA or in the PPA of 2006 or on the DOL website or somewhere in CFR or in Shulman's treatises, for a more formal definition of "retirement".  These sources certainly define everything else ad nauseum.  It is sort of disconcerting to find that the word "retirement" is defined at all, even in an exclusionary way.  

I believed that, as concluded, when the Participant enters pay status.  Thanks for your encouraging and confirmatory comments.

David