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Failure of Plan administrator to provide information about Plan benefits to Alternate Payee.

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I had a case recently where an ERISA qualified union plan provided a pro forma set of QDRO procedures and a Model Order for a shared interest in it's defined benefit plan.  There was no mention of survivorship, that is, no mention of the availability of a QJSA or QPSA options.  I used their Model Form as a rough guide, but added language providing the Alternate Payee with a 100% QJSA and a 50% QPSA as agreed to by the parties in their Marital Settlement Agreement incorporated in the Judgment of Absolute Divorce. 

The Plan's attorney responded that the Plan did not permit QJSA or QPSA options.  I responded quoting IRC 414(p)(5), IRC 401(a)(11), 26 CFR § 1.401(a)-20 - Requirements of qualified joint and survivor annuity and qualified preretirement survivor annuity, Q. 3-5 and Appendix C of the attached DOL, EPSA pamphlet, and referring them to https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-qualified-joint-and-survivor-annuity.  

The attorney responded that they would permit the QJSA or QPSA options, but that I could not specify the percentages.  (The Plan provided that the QJSA had 50%, 75% and 100% options available; and the QPSA had 50% available.) I responded by reminding them of their obligations as Plan Administrators to provide informations about plan benefits to Alternate Payees (Questions 2-1 and 2-5 of the attached DOL,EPSA pamphlet), and sent them a copy of the PBGC Model Order Booklet,PBGC booklet,  Page 12, Section 10  reflecting the option of inserting any available QJSA or QPSA percentage agreed to or ordered by the trial court.  I also suggested that legal fees were awardable to the Alternate Payee for their failure to fulfil their obligations, citing 29 USC Section 1132(g), 28 USC Section 1927, and Chambers v. Nasco, Inc., 501 U.S. 32, 44–46 (1991) outlining the court's inherent power to assess attorney fees especially when a party is litigating in bad faith.  https://scholar.google.com/scholar_case?case=12894484016394117131&q=chambers+v.+nasco,+inc.&hl=en&as_sdt=20000003  

The QDRO was finally approved as I have drafted it.  

It was unmistakably clear that the attorney for the Plan was intent on protecting their Participants to the detriment of their former spouses, and hoped that persons less knowledgeable than I would not know the difference.  Perhaps this happens all the time and I am just naive.  But it never happened to me in the 33 years I have been preparing QDROs.     

What do you think I should do, if anything?  Any ideas?  



DOL re QDROs.pdf

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While the QDRO fiduciary's lawyer appears particularly dispicable, union plans in particular are really terrible at complying with the law, out of either incompetence or misplaced knee-jerk support of the union member.  However, I doubt that there is anything you can do formally because you did such a good job of lawyering that you avoided an outcome that was a breach of fiduicary duty.  Had you been unsuccessful at persuasion and forced to pursue the claims procedure, or other path, to court, you could have made the fiduciary suffer fees and costs, as you pointed out. With respect to the lawyer, since he or she was dealing with another lawyer (you), I doubt that any sanction is available under the applicable code of legal ethics.  The lawyer was zealously advocating for the (misguided) client. And that lawyer can say to you, with impunity, whatever the lawyer chooses. Your success is your worst enemy with respect to your desire for discipline.  And the DOL doesn't care becuase the DOL doesn't understand QDROs (but I am glad you could put the DOL's marginal materials to good use), but more importantly the DOL is too busy dealing with achieved breach of fiduciary duty to trifle with a failed attempt.  So you are left with informal measures, such as public shaming, which are inadequate if only for lack of a forum that has a relevant audience.  I am not aware of a website that has a ratings or a bashing platform that would reach a QDRO audience. I note that you did not name names here.  And what would you say?  XYZ Lawyer is either an ignoramus or a knave, but can ultimately be defeated by a persistent super competent professional? 

Or maybe you could punch him/her out in a back alley, which is what I felt like doing a lot before I switched career paths and left litigation, much to my integrity, inner peace, and possible longevity (as yet undetermined).  Too much skullduggery is tolerated, or at leat not punished, under this "zealous advocacy" BS.

My dig at the DOL was not properly formulated in context or properly focused, but I am going to leave it anyway, because one should never pass up an opportunity to point out the DOL's shortcomings with respect to QDROs.

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Many thanks.  I have certainly encountered Plan Administrators who favored their employees over their former spouses.  Witness the entire US Military for example.  But I really cannot abide a "slick" lawyer who would violate his/her oath as an officer of the court and the Rules of Professional Conduct with such blatant impunity.  Oh, well.  I must be satisfied by contemplating a few of my favorite sayings - 

What goes around comes around.
Paybacks are hell. 
Your chickens will eventually come home to roost.  
You made your bed, now you must lie in it. 
Lay down with dogs, get up with fleas. 
You reap what you sow. 
Karma is a bitch. 
You will receive your just deserts. 
Those who sow the wind will reap the whirlwind. 
Every dog will have his day.
You can run, but you can't hide.
If you live by the sword you will surely die by the sword. 
If you play with fire, you're gonna get burned.
Those who foolishly sought power by riding the back of the tiger ended up inside.

Hmmm.  Not that comforting. 


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If you “really cannot abide” what you observed as a lawyer’s violation of our professional-conduct rules, you may—after getting your client’s informed consent—report the misconduct to whichever court (or its disciplinary authority) regulates the misbehaving lawyer.

Beyond others, here’s an important caution:

Rule 8.3 “does not require” (and does not, by itself, permit) revealing rule 1.6 confidential information.  Rule 8.3(c) subordinates a duty to report misconduct to a duty to preserve a client’s confidences.  See, for example, In re Ethics Advisory Panel Opinion No. 92-1, 627 A.2d 317 (R.I. 1993) (if a lawyer learns of another lawyer’s misconduct while the observing lawyer represents her client, the duty of confidentiality prohibits reporting the other lawyer’s misconduct without the observing lawyer’s client’s consent, even if the observing lawyer learned of the misconduct from other lawyer’s admission rather than from the observing lawyer’s client).

Confidential information is broader than privileged communications.  It covers (at least) “information relating to the representation of a client[.]”  Rule 1.6(a).

Rule 8.3’s comment 2 exhorts the observing lawyer to “encourage a client to consent to disclosure where [investigation of the misbehaving lawyer] would not substantially prejudice the client’s interests.”

But the consent must be informed consent.  It requires that one “communicate[] adequate information and explanation about the material risks of[,] and reasonably available alternatives to[,] the proposed course of conduct.”  Rule 1.0(e).

The quotations and paraphrases above are from the American Bar Association’s Model Rules.  You would check the rules that govern you.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania



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