Rightfully Yours (eBook)

Preface x
1 Did Your Divorce Decree Grant You a Portion of Your 1
Ex-Husband’s Future Pension? (It Should Have!)
1. Don’t Forget the Pension 2
2. It’s Your Property Right 3
3. It’s Not Alimony 4
4. How Much Is the Retirement Benefit Worth? 5
4.1 Defined contribution plans 5
4.2 Defined benefit pension plans 7
5. The Use of Offsetting Assets 9
6. A QDRO Is a Must 9
2 What Is a QDRO? (And Why Do You Need One?) 10
1. Horror Story No. 1 11
2. Horror Story No. 2 12
3. Horror Story No. 3 13
4. Congress Created QDRO Laws in 1984 13
5. The Requirements of a QDRO 15
6. Pension Plan Administrators Can Throw Out Your QDRO 17
If They Don’t Like It
3 What Types of QDROs Are Available? 19
1. Two Types of QDROs for Defined Benefit Pension Plans 19
2. Survivorship Benefits under Defined Benefit Pension Plans 20
3. Former Spouses Can Get Survivor Protection 20
4. The Separate Interest QDRO 21
Contents
iii
iv Rightfully yours: How to get past-due child support, alimony, and your ex’s pension
5. The Shared Payment QDRO 22
6. QDROs for Defined Contribution Plans 22
4 Do You Need to Get an Attorney to Draft a QDRO? 23
(What If You Can’t Afford One?)
1. Contact Your Original Divorce Attorney 23
2. Contact a New Family Law Attorney 24
3. Try to Draft a QDRO Yourself Using a Sample QDRO 24
from this Book
3.1 Step-by-step instructions for completing a sample 26
QDRO yourself
4. Getting the Judge’s Signature 28
5 How Do You Deal with the Plan Administrator? 30
1. Plan Administrators and You 31
2. Remaining Nonadversarial with the Plan Administrator 31
3. Problems in Discovery 34
4. Your Rights under the Federal Pension Law Called ERISA 35
5. Administrative Fees for Processing QDROs 36
6. Constructive Notice of a QDRO 37
7. The Company’s Own Model QDRO Language 38
8. The Administrator’s Approval and Signature 39
6 Could Your Ex-Husband Have More than One Pension? 40
1. Nonqualified Retirement Plans Not Subject to QDROs 41
2. Types of Defined Contribution Plans 41
3. Types of Defined Benefit Pension Plans 42
4. Coverage under Two Defined Benefit Pension Plans 43
5. A Separate QDRO for Each Plan 44
6. Don’t Forget about Your Ex-Husband’s Previous Employment 45
7 How Much of the Pension Are You Entitled to Receive? 46
1. Determining the Marital Portion of a Defined Contribution Plan 47
2. Premarital Account Balances 47
3. QDRO Tips for Determining Your Share of a Defined 47
Contribution Plan
3.1 Interest and investment earnings 48
3.2 Sneaky plan loans by participants 48
3.3 Contributions made after divorce that were for periods 48
before divorce
4. Determining the Marital Portion of a Defined Benefit 49
Pension Plan
Contents v
5. Coverture: The Recommended Approach for QDROs under 51
Defined Benefit Pension Plans
5.1 The mechanics of the coverture approach 53
5.2 Model coverture language 55
5.3 If your divorce decree did not include a coverture formula 56
8 When Can You Start Receiving Your Share of the Pension? 57
(Do You Have to Wait Until Your Ex Retires?)
1. The Early Retirement Subsidy 58
1.1 How does the early retirement subsidy affect an alternate 59
payee under a QDRO?
1.2 What if a shared payment QDRO is used? 60
1.3 When can you receive benefits under a defined 60
contribution plan?
2. Direct Distribution or Rollover to an Individual 61
Retirement Account
3. Establishing Separate Accounts 61
9 Are You Entitled to Receive Your Share of the Pension for 63
Your Entire Lifetime? (If So, How Can You Secure a
Lifetime Pension?)
1. Use of a Separate Interest QDRO 64
2. Use of a Shared Payment QDRO 65
3. Contact the Plan Administrator If Uncertain 65
4. What about a Defined Contribution Plan? 66
10 Is It Too Late to Draft a QDRO Now? (Your Divorce Occured 67
Years Ago)
1. The Importance of Drafting a 401(k) Plan QDRO before Your
Ex-Husband Terminates His Employment 68
2. What If the Plan Makes a Distribution to Your Ex-Husband 69
While the QDRO Process Is Pending?
3. Is There an 18-Month Maximum Segregation Period for 70
Pending QDROs?
4. Check for a Possible Rollover to an Individual Retirement 71
Account
5. What If the Original Divorce Decree Was Silent on the 71
Pension Issue?
6. The Buildup of Child Support or Alimony Arrearage 72
after Divorce
11 What about Past-Due Child Support and Alimony 74
(Can You Use a QDRO for This?)
1. Does This Sound Familiar? 74
vi Rightfully yours: How to get past-due child support, alimony, and your ex’s pension
2. QDROs for Child Support and Alimony 75
3. Using Multiple QDROs 76
4. A Tax Tip for Child Support QDROs 76
5. Getting Past-Due Child Support Payments or Alimony from 78
a Defined Contribution Plan
6. Getting Past-Due Child Support Payments or Alimony from 79
a Defined Benefit Pension Plan
12 Your Ex-Husband Has Already Retired (Is It Too Late to 86
Draft a QDRO?)
1. You Must Use a Shared Payment QDRO If Your Ex-Husband 86
Is Retired
2. A Possible “Catch-22” Situation That Will Destroy Any Chance 87
You Have to Receive a Lifetime Pension
3. No Retroactive Pension Payments Are Allowed If Your 88
Ex-Husband Is Already Retired
4. There May Be a Way to Recoup Lost Pension Payments 89
13 Your Ex-Husband Has Died (Is It Too Late to Draft a QDRO?) 90
1. Get the QDRO Done before Your Ex-Husband Dies 91
2. Your Ex-Husband Died before the QDRO Was Done: 91
What Do You Do Now?
14 You Are Going Through a Divorce (What Should You Know 94
about the QDRO Process?)
1. Complete Discovery of All Plans of Coverage 94
2. The Separation Agreement: Making Sure Your Attorney 95
Doesn’t Shortchange Your QDRO Rights
2.1 Calculation of assigned benefit: Coverture recommended 96
2.2 Survivorship protection 96
2.3 Postretirement cost of living adjustments 97
2.4 Early retirement subsidy 97
2.5 Anti-circumvention language 98
3. Incorporate the QDRO by Reference into Your Decree 100
4. Don’t Forget the Boilerplate 101
5. The Follow-Through with the Plan Administrator 101
15 Your Attorney Never Drafted a QDRO for You (Is This 102
Considered Malpractice? What Are Your Options Now?)
1. Failure to Draft a QDRO 103
2. Be Proactive 104
3. Consider a Malpractice Suit a Last Resort 105
Contents vii
16 What If Your Ex-Husband Is Covered under the Federal 106
Civil Service Retirement System?
1. Dividing the Employee Annuity 107
1.1 What are the employee eligibility requirements? 107
1.2 What are the maximum allowable payments to the 108
former spouse?
1.3 Are there any application requirements for the former spouse? 108
1.4 When do payments to a former spouse terminate? 109
2. The Refund of Employee Contributions 109
2.1 What amounts are subject to a court order acceptable 109
for processing?
2.2 Will the payment of a refund of employee contributions 110
terminate any future rights to a portion of the employee
annuity or a survivor annuity?
2.3 Can a COAP prevent a separated employee from receiving 110
a refund of employee contributions, in order to secure
a former spouse’s future right to a portion of an employee
annuity or a former spouse survivor annuity?
3. Former Spouse Survivor Annuities 110
3.1 What are the maximum survivor benefits payable under 110
the Civil Service Retirement System?
3.2 Are there eligibility requirements for the former spouse? 111
3.3 Do you have a future right to a former spouse survivor 111
annuity?
3.4 How does the employee or former spouse pay for the cost 111
of providing a former spouse survivor annuity under a COAP?
3.5 Once a court order acceptable for processing has been 112
prepared, where should it be sent?
3.6 Can court orders bar the payment of employee annuities? 112
3.7 What kind of formulas can be used in a COAP to identify 113
the former spouse’s share of the employee annuity?
17 What If Your Ex-Husband Is Covered under a Military 117
Retirement Plan?
1. The 10/10 Rule for Property Divisions 118
2. Maximum Payments to a Former Spouse 118
3. The Military Uses Only the Shared Payment Approach 119
4. The Soldiers’ and Sailors’ Civil Relief Act of 1940 120
5. Survivor Benefit Plan (SBP) Coverage for a Former Spouse 121
6. Deemed Election of Former Spouse Coverage 122
7. Termination of SBP Surviving Spouse Coverage on the 123
Remarriage of a Former Spouse before Age 55
viii Rightfully yours: How to get past-due child support, alimony, and your ex’s pension
8. Anti-Circumvention Language 123
9. Model Military Court Orders to Divide Retired Pay 125
18 What If Your Ex-Husband Is Covered under the Railroad 140
Retirement Board Pension Plan?
1. A Tier I Annuity Is Not Divisible by a Court Order 140
2. A Tier II Annuity Is Divisible by a Court Order 141
3. Vested Dual Benefit Payments and Supplemental Annuities 142
4. Survivor Rights to Tier II Annuities 143
5. Other Railroad Retirement Board Pension Plan Coverage 144
6. Model Court-Ordered Language to Divide the 144
“Divisible Portion” of Railroad Retirement Benefits
19 Is There Model QDRO Language That You Can Use? 149
Glossary of QDRO and Pension Terminology 175
SAMPLES
1 To obtain past-due child support (From a defined benefit 80
pension plan)
2 To obtain past-due child support (From a defined contribution 83
plan such as a 401(K))
3 Model court order acceptable for processing (COAP) under the 114
Civil Service Retirement System
4 Military qualifying court order (For active members) 126
5 Military qualifying court order (For reservists) 131
6 Military qualifying court order (If currently retired) 136
7 Model qualifing court order to divide railroad retirement 146
benefits
8 Separate interest QDRO for defined benefit pension plans 151
(For active plan participants)
9 Shared payment QDRO for defined benefit pension plans 156
(For active plan participants)
10 Participant already retired in a defined benefit pension plan 161
(Utilizing fixed-dollar award and providing entire survivor
annuity to alternate payee based on election at retirement)
11 Defined contribution plans (For use when simply assigning 164
50 percent of total account balance)
12 Defined contribution plans (For use when assigning a 167
fixed-dollar amount)
13 Defined contribution plans (For use when participant keeps premarital acount balance) 170