"In 2022 there were 673,989 divorces in the United States. There are about 163,000 ERISA qualified pension and retirement plans in the US plus another 12,000 plans governed by other sections of Federal law (FERS, CSRS, Military, to name a few), plus State, County, Municipal plans that operate pursuant to local laws and regulations, and International plans.
"I have been trying since Secure 1.0 to determine how Secure
1.0 and now 2.0 will interface with defined contribution plans where historically the Alternate Payee's share has paid in the form of an immediate lump sum either: [1] tax free to the Alternate Payee's IRA or other qualified retirement plan, or, [2] in the form of a taxable distribution directly to the Alternate Payee, but no 10% early withdrawal penalty.
"The main question is whether or not the election
by a Participant in a defined contribution plan of an annuitized payout pursuant to Secure 2.0 during the marriage can be superseded by a subsequent QDRO entered by a Court pursuant to State law directing a lump sum payout, and how will that payment be computed and paid?
"It is not clear to me whether or not a Participant can make such an election prior to retirement. And if it is possible for the Participant to purchase an
annuity during prior to retirement and during the marriage without notice to or consent by the spouse. Timing of events is critical to the rights and responsibilities of the parties. Federal preemption is an every present sword of Damocles. Plan documents and options vary and usually rule.
'I participate in quite a few other QDRO oriented blogs and nobody seems to have any answers. Am I the only one that is worried about
this? Or is it just the OCD required to afflict all members of the Bar. Since pension and retirement benefits represent one of the two highest value assets owned by the parties (the equity in their home being the other), that is an important matter."
