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Survivor Benefit Provision Interpretation


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QDRO entered and submitted in 2003, and contains the following relevant provisions:

1. The Alternate Payee shall receive payments from the Plan of the benefits assigned to the Alternate Payee under this Order commencing as soon as is practicable after this Order has been determined to be a QDRO or, if later, on the date the Participant commences receiving benefit payments from the Plan.  Payment to the Alternate Payee pursuant to this Paragraph shall cease on the date that payments from the Plan with respect to the Participant cease.  Survivor benefits, to the extent provided in this Order, are not affected by the provisions of this Paragraph.

2. The Alternate Payee is assigned for her lifetime 50% of the net payments after mandatory deductions and survivors benefits to be paid to Participant and Participant covenants and agrees that he shall make all proper provisions to ensure such payment of benefits to Alternate Payee and keep her as the beneficiary of any available survivor benefits.

3. The Alternate Payee shall be treated as the Participant's "surviving spouse" for purposes of the Order, the Plan or Internal Revenue Code Sections 401(a)(11) and 417.

 

In 2014, Participant, now re-married, submitted a retirement benefit application naming his new spouse as beneficiary and electing a 10 year certain annuity (with remainder of payments after Participant's death going to a named beneficiary) in lieu of a joint and survivor annuity.  The application was signed/consented to by his current spouse, but not the former.  Participant retired and commenced receiving annuity payments, with 50% going to former spouse/AP pursuant to the QDRO.  Participant died in 2019, with about 5 years left of the 10 year annuity.

The plan has refused to make any payments to the current spouse, even the 50% retained by participant pursuant to the QDRO, and is instead making the payments entirely to AP.

Is there an argument to be made that the phrase "The Alternate Payee is assigned for her lifetime 50% of the net payments after mandatory deductions and survivors benefits to be paid to Participant and Participant covenants and agrees that he shall make all proper provisions to ensure such payment of benefits to Alternate Payee and keep her as the beneficiary of any available survivor benefits" means that the AP is only entitled to 50% of the future annuity payments, with the other 50% going to Participant's current spouse?  Or, does the phrase "The Alternate Payee shall be treated as the Participant's "surviving spouse" for purposes of the Order, the Plan or Internal Revenue Code Sections 401(a)(11) and 417" mean that AP gets everything?

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If I undeerstand what you have asked, AP gets everything (and maybe has a claim against the participant's estate and/or the plan for failure to elect a distribution option consistent with the QDRO).

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3 hours ago, Pension Dork said:

P.S.  These boards are inspiring me to hang out my own shingle as a QDRO consultant.   Can't be more difficult than explaining a pension plan's Social Security leveling payment option to a retiring employee........and it was a contributory plan.  Yikes! 

Sorry, but don't.  Just don't.  I don't have time to go through all that you have written which is less than perfect.   

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