McCormack Family Law | Top Divorce Lawyer | Child Custody & Support

The last post on this topic was about the best way to get a Qualified Domestic Relations Order (QDRO). In short, you have to get the language just right.

Now and then, however, it happens that a perfectly written DRO, qualified by the plan administrator and thus turned into a QDRO… is wrong.

Back to our heroes, Harry and Mary Band. They finally have a QDRO in place and the pension plan is sending out two checks: one to Mary for her half of the marital portion and another to Harry for the rest of the benefit.

‘Wow! Check’s so small I can’t even see it!’ says Mary.
‘I hardly feel the pinch,’ smiles Harry.

The asset division in their divorce decree says that Mary gets half of Harry’s 20-year pension benefit. Period. Unfortunately, the DRO says that she gets half of the benefit as of the date of divorce. The decree and the QDRO are at odds.

As it happens, the Bands’ divorce was final when Harry had 19.3 years of service in. The way his plan is written, his benefit becomes worth much more at 20 years of service than it was at 19.3 years of service.

The QDRO that the pension administrator follows gives Mary half of the smaller benefit amount. The court intended for her to get half of the larger amount.

How did this incorrect DRO get qualified? Didn’t the pension plan administrator do the math? Of course not. That’s not his job; he just looks at the language of the DRO, not whether it correctly calculates how much each party should get.

Who’s job is to do know the terms of the pension plan and do math? Once again, it is the job of the lawyer. The lawyer has two DRO responsibilities. First, to ensure that the language of the DRO meets the exacting requirements of the law. Second, to ensure that it puts into effect the intent of the terms of the divorce decree.

A divorce decree is a judgment: it decides the rights and responsibilities of the parties. But a DRO is not a judgment—that is, it doesn’t decide anything. It is simply a type of  document that helps put a judgment into effect.

Therefore, an incorrectly calculated QDRO can be changed. Fortunately, most decrees contain a standard paragraph that says the court retains jurisdiction to correct any DRO that doesn’t effectuate the intent of the decree. Even better, courts inherently have that power.

So what can Mary do? Go back to court and get it corrected.

That means more expense, of course. A better strategy from the start is to make sure legal counsel –or the pension experts he uses– has a good grasp of pension law and the ability to correctly interpret pension plan documents.

By the way, when a lawyer acts to prequalify the DRO, he can ask the plan administrator how the DRO language dividing the benefit will be interpreted. In the case of the Bands, the incorrect allocation of benefits would have been caught –and fixed– right away.

Tags: divorce and pensions, DRO, QDRO

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