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Help Me Understand Divorce and Pension and QDRO


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I am in desperate need of sound advice. I think I am going to get screwed by Pennsylvania law once again.

 My ex wife and I were married Sept. 1989, separated in March 2008 and were divorced in August 2009. I am a newly retired police officer and she is a nurse. We both have pensions. She is entitled to 25% of mine (I thought up to the date of separation which is 18 years). She was ordered by a judge to give me half of her 401k at the time, about $12,000 so I could roll it into an IRA that I opened. He told her not to touch it otherwise. I never got the money.  The judge required both of us to have a QDRO completed within 30 days following divorce. Neither of our attorneys followed through with our individual QDROs.

Fast forward to now. I am retired and can’t collect my pension. I just had my QDRO done, but my ex refuses to do one. She also says she recently took out whatever money was in that 401k, so the balance is zero. To top it off, the attorney who just did my QDRO says she is entitled to 25% of my entire career of 28 years plus $43,000 of the DROP ( which I paid into from 2017-present).  Is this accurate? How can this be fair? Is she in violation of the court order if she doesn’t get a QDRO done? 

What recourse do I have, if any? Please help...

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A significant part of answering your questions depends on the actual specific terms of your divorce settlement/judgment and on state (Pennsylvania) domestic relations law rather than federal “QDRO” law.

Also, a few statements are confusing, such as you are retired but cannot start your pension.

Your lawyer’s statement does sound unexpected but the lawyer should explain it to you - and that explanation should refer to the terms in your original divorce papers.  The participants on this board cannot affirm or criticize without a complete review of documents and history.  And then there is that pesky state law that few  or none of us are familiar with.

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9 hours ago, Pmrpretired said:

I retired January 31st. I can not collect my monthly pension payment until the QDRO is approved.

What you need is a competent lawyer; nothing on this board is going to replace that.

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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SEE MY RESPONSES IN ALL CAPS BOLDED: 

 

 My ex wife and I were married Sept. 1989, separated in March 2008 and were divorced in August 2009. I am a newly retired police officer and she is a nurse. We both have pensions. She is entitled to 25% of mine (I thought up to the date of separation which is 18 years). I ASSUME THAT YOU WERE NOT AWARDED A SHARE OF HER PENSIONPLEASE CONFIRM  She was ordered by a judge to give me half of her 401k at the time, about $12,000 so I could roll it into an IRA that I opened. He told her not to touch it otherwise. I never got the money.  YOUR LAWYER SHOULD HAVE PREPARED A QDRO, OR DIRECTED YOU TO SOMEONE WHO PREPARES QDROS, THAT WOULD HAVE ROLLED OVER YOUR $12,000 FROM HER 401(K) TO YOUR IRA.  THAT SHOULD HAVE BEEN DONE IMMEDIATELY AFTER THE DIVORCE, NOT 11 YEARS LATER.   IF SHE HAS LEFT HER EMPLOYMENT WHERE THE 401(K) ACCRUED, AND IF SHE REMOVED ALL OF THE 401(K) FUNDS, THEN A QDRO IS NOT GOING TO HELP YOU.  YOU NEED TO SUE AND ASK THE COURT TO ENTER A JUDGMENT AGAINST HER FOR THE $12,000 DUE AND FIND ANOTHER WAY TO COLLECT IT.  SHE STILL OWES YOU THE MONEY; YOU WILL HAVE TO FIND ANOTHER WAY TO COLLECT IT.  ASK FOR LEGAL FEES AS WELLYOU SHOULD ALSO ASK TO GAINS AND LOSSES AND INVESTMENT EXPERIENCE FROM THE DATE OF DIVORCE UP TO DATE, BUT THAT MAY BE DIFFICULT TO COMPUTE WITH HIRING AN EXPERT WITNESS.    The judge required both of us to have a QDRO completed within 30 days following divorce. Neither of our attorneys followed through with our individual QDROs.

Fast forward to now. I am retired and can’t collect my pension. I just had my QDRO done, but my ex refuses to do one. WHY WOULD ANYBODY DO A QDRO IF THE 401(K) FUNDS ARE GONE?   She also says she recently took out whatever money was in that 401k, so the balance is zero. To top it off, the attorney who just did my QDRO says she is entitled to 25% of my entire career of 28 years plus $43,000 of the DROP ( which I paid into from 2017-present).  Is this accurate? How can this be fair? Is she in violation of the court order if she doesn’t get a QDRO done? THE AMOUNT OF HER SHARE OF YOUR PENSION IS CUSTOMARILY COMPUTED BY TAKING 50% OF YOUR RETIREMENT BENEFIT EACH MONTH AND MULTIPLYING IT BY A FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF MONTHS DURING THE MARRIAGE THAT YOU ACCRUED CREDITABLE SERVICE TOWARD RETIREMENT, AND THE DENOMINATOR OF WHICH IS THE TOTAL NUMBER OF MONTHS OF CREDITABLE SERVICE ACCRUED AT THE TIME OF RETIREMENT (THE "COVERTURE FRACTION").  UNLESS THE JUDGE MISSTATED THE FORMULA TO COMPUTE HER SHARE, SHE IS NOT ENTITLED TO A SHARE OF THE FULL 28 YEARS OF SERVICE.  OFTEN THE COURT WILL SAY THAT SHE IS ENTITLED TO 50% OF THE "MARITAL PORTION" OF YOUR RETIREMENT.  THAT LANGUAGE MEANS THE FORMULA I SET FORTH ABOVE.  SO YOU NEED TO LOOK CLOSELY AT THE EXACT LANGUAGE USED BY THE JUDGE.  

AS FAR AS THE DROP IS CONCERNED, IN MARYLAND WHERE I PRACTICE THE DROP BENEFITS ARE CONSIDERED PART OF A POLICE RETIREMENT EVEN THOUGH NOT SPECIFICALLY ADDRESSED BY THE PARTIES OR BY THE COURT.  AND IN MARYLAND IF THE COURT DID NOT ORDER THAT SHE RECEIVE SURVIVOR ANNUITY BENEFITS, SHE DOESN'T GET THEM....PERIOD.  NOTE THAT MANY PLANS FOR POLICE, FIREFIGHTERS AND CORRECTIONAL OFFICERS DO NOT PROVIDE SURVIVOR ANNUITY BENEFITS FOR FORMER SPOUSES.  YOU ARE GOING TO NEED A LAWYER IN PENNSYLVANIA TO RESEARCH THESE ISSUES.  NORMALLY POLICE PLAN ARE NOT UNDER ERISA, THE FEDERAL LAW COVERING PRIVATE CORPORATIONS, NOR ARE THEY STATE PLANS UNLESS YOU WERE A STATE TROOPER.  THEY ARE MOSTLY COUNTY PLANS AND EACH ONE MAY BE DIFFERENT. 

WHERE DO YOU LIVE.  PERHAPS SOMEONE ON THIS BLOG CAN REFER YOU TO AN ATTORNEY. 

DAVID        

 

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  • 2 weeks later...

First, I apologize, the $12,000 was to come from her first Nurse’s Pension not a 401k.  Second, the state of Pennsylvania put into law Act 175 in 2005. This act seems to state she is entitled for the full 28 years.  As of today, ex-wife still won’t sign my QDRO. She is angry to be receiving 25% and thinks she should get 50%. She’s threatening to ask for more child support unless I amend our Marital Settlement Agreement. She’s demanding I cover the kids medical through age 26 and that I forgive the money she owes me from her pension.  

Today, I went in and signed the forms to start receiving my pension without her signature on the QDRO.  I need money to pay my rent and bills.  I don’t know if they will allow it to go through or not. I have tried to do the right thing here. I can’t help that she is greedy and selfish.  I am going to put $800 a month (her payment) into an account for when this gets settled. This way I have the funds on hand. 

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Your situation is too difficult to be handled in this sort of forum.  You need to hire a lawyer in the jurisdiction where the divorce was granted and make sure that lawyer understands how the system works in Pennsylvania and how your particular pension works as well.  If no QDRO is entered she will not get her share, but it may accrue so you are wise to set aside a sum to pay her when and if the matter is resolved.  Keep in mind that you are paying state and Federal taxes on the full amount you receive, so the amount you give to her will have to be reduced by the amount of taxes you paid on her share.  You may need an accountant to help you figure that out.   

Where was the divorce granted?     

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  • 4 weeks later...
  • 1 month later...

Have a motion from the ex asking to include a sum of money to be paid to her or the attorney to pay my half of QDRO prep, mediator etc. Can this be done? They have been holding this up for 4 years now because the decree has third party payments owed to be paid from my Fidelity account. They state the QDRO does not conform to Amended decree so I said then lets amend and the ex said no that they amended already and deserve finality.

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Quote

Have a motion from the ex asking to include a sum of money to be paid to her or the attorney to pay my half of QDRO prep, mediator etc. Can this be done? They have been holding this up for 4 years now because the decree has third party payments owed to be paid from my Fidelity account. They state the QDRO does not conform to Amended decree so I said then lets amend and the ex said no that they amended already and deserve finality.

What does your attorney say?  

(We don't really need to know what your attorney says.  You need to know what your attorney says.  If you need to get an attorney, or a different one, make sure that person is well-versed in QDROs.)

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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