Jump to content

QDRO- 18-month segregation effective date to secure alternate payee's community share


Recommended Posts

Scenario - A pension plan was joined to a divorce back on June of 2016; after the case was filed back on July of 2015 .

In August of 2016, alternate payee receives an audit letter from the plan , to put up her community share in an interest-bearing account, until the divorce is final.

The plan received a certified QDRO in July of 2018. 

Do the plan hold the funds that were set- up in the interest-bearing account mentioned in the  audit letter, back in 2016, in a 18-month segregation period, required by erisa , or when they are joined to the divorce ??

If so, 18- months will expire soon ... under ERISA when are they required to release the retroactive benefit to the alternate payee ?

Thanks kindly,

Destiny 

Link to comment
Share on other sites

  • david rigby changed the title to QDRO- 18-month segregation effective date to secure alternate payee's community share

See my comments in ALL CAPS BOLDED

Scenario - A pension plan was joined to a divorce back on June of 2016; WHAT DOES THAT MEAN?  JOINED?  after the case was filed back on July of 2015 .

WHO ARE YOU?  THE PARTICIPANT?  ALTERNATE PAYEE?  PLAN ADMINISTRATOR? ATTORNEY FOR  ANY OF THE FOREGOING? 

In August of 2016, alternate payee receives an audit letter from the plan , to put up her community share in an interest-bearing account , until the divorce is final . WHAT GENERATED THAT "AUDIT LETTER" FROM THE PLAN.  IN YOUR STATE DOES THE ALTERNATE PAYEE HAVE A RIGHT TO DIRECT HER COMMUNITY PROPERTY, OR MUCH THAT AWAIT THE ISSUANCE BY A QDRO AND ITS APPROVAL BY THE PLAN.  IN EQUITABLE DISTRIBUTION STATES "MARITAL PROPERTY" DOES NOT EXIST EXCEPT IN CONNECTION WITH A DIVORCE.  IS THAT TRUE IN YOUR STATE WITH REGARD TO COMMUNITY PROPERTY?  I ASSUME THE SEGREGATION OF FUNDS WAS INTENDED TO PROTECT THE ALTERNATE PAYEE'S SHARE.  The plan received a certified QDRO in July of 2018. DID THE PLAN APPROVE/QUALIFY THE ORDER?  WHEN?  IF IT IS APPROVED IT SHOULD BE PAID TO THE ALTERNATE PAYEE IMMEDIATELY.  

Do the plan hold the funds that were set- up in the interest barring account mentioned in the  audit letter , back in 2016, in a 18-month segregation period, required by erisa , or when they are joined to the divorce ??  IF THE PENSION (THAT I SUSPECT IS A DEFINED CONTRIBUTION PLAN AND NOT A PENSION) IS COMMUNITY PROPERTY, WOULDN'T THE FULL AMOUNT BE DIVIDED, THAT IS, NOT LIMITED TO THE AMOUNT THAT WAS SEGREGATED? OR DID THE COURT FREEZE THE AMOUNT AS OF A CERTAIN DATE?      

If so, 18- months will expire soon ... under erisa when are they required to release the retroactive benefit to the alternate payee ? THE PLAN HAS 18 MONTHS FROM THE DATE IT RECEIVES THE QDRO TO APPROVE IT.  THAT WOULD ACCOUNT FROM JULY, 2018.  START AT PAGE 4 OF THE FOLLOWING https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/qdro-determining-qualified-status-and-paying-benefits.pdf

Link to comment
Share on other sites

As implied above, might be relevant, especially to the time of payment:  is the plan a defined benefit (DB) plan or defined contribution (DC) plan?

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.

Link to comment
Share on other sites

Yeah but, …. we've seen lots of confusion about this.  Sometimes, the participant/AP thinks a "separate interest" DB benefit is an "account".  Better to ask than to assume.  No disrespect intended, but I'm still not convinced the questioner knows the diff.

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.

Link to comment
Share on other sites

I don't disagree with your concerns. It's difficult to respond to a questioner who doesn't have a clue what's going on.  The same is likely true of his/her attorney and the judge as well.  I see this (and worse) regularly on this blog and on my own DSGfamily listserv here in Maryland/DC/Virginia with about 1500 members where attorneys are inquiring about QDROs never prepared/signed/submitted/qualified in connection with a divorce that took place in the 80s and 90s, and now somebody has died/remarried/retired/moved to Tierra del Fuego, or the Plan is not under the supervision of the PBGC.   

Maryland has a "discovery" rule with regard to legal malpractice, that is, the statute of limitations does not expire in 3 years; it expires 3 years after the client knew or in the exercise of reasonable care should have known of the attorney's violation of the standard of care.  That can be years in the future. 

Tip for us all - buy the extended reporting endorsement (tail) to your errors and omissions coverage when you retire.         

Link to comment
Share on other sites

 I’am a alternate payee .. plan received a certified QDRO back on July 2018 .. Divorce was filed July 2015.

Pension plan was joined to the divorce case , to divide the assets . The plan is a contribution plan.

Does the 18-month segregation begin when the plan receives a certified QDRO from the court .

The plan never sent a letter when they will start the 18- month segregation period .  It is a shared pension . Not seperate .

Link to comment
Share on other sites

@fmsinc

 

To be clear , the plan states they released the interest barring account two months after they sent the letter to my ex- husband .

QDRO has provisions that the ADMINSTRATION have to pay me an offset , if the participant is paid my share .

The plan did not have a certified QDRO at the time . They made a mistake . They sent me an audit letter and than released the funds to my ex- husband back in 2016, a few months after , they sent me an audit letter .

We we were still in divorce court . Then , when they received a certified QDRO a few years letter they nailed me a letter that they released my share. They never sent me or the QDRO attorney a letter that they released my share in 2016, to my ex.

They approved the QDRO in Sept 2017. And , received a certified QDRO July 2018.

Now , I’am going after the administration through the DOL. DOL is investigating the files . Iam asking for an offset of my share .

Link to comment
Share on other sites

Unfortunately, Destiny, I cannot help you because your recitation the the facts make no sense.  You said it a "contribution" plan, and by that I assume it's a DEFINED CONTRIBUTION plan like a 401(k).   In my experience your comments about 18 months have nothing whatever to do with your problems.  As I noted above, the plan has 18 months from receipt of the QDRO and to approve it.  That's the only significance of the 18 months language.  And almost all plans don't take that long.  There is no 18 month waiting period for you to receive a transfer of your share once the QDRO is approved.  Once the Plan has approved the QDRO they should normally offer you the option of rolling it over to you own IRA, or making a taxable distribution to you.  And there may be other options.   

I suspect you didn't have a lawyer or didn't have a lawyer who know how these matters were handled.   You need to find an attorney who can help you.  There is likely more involved, but we cannot be of assistance if we cannot understand what happened that resulted in matters not proceeding in the usual way.  

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...