Qualified Domestic Relations Orders submitted to PBGC
Qualified Domestic Relations Orders submitted to PBGC
QDRO 2024 v 20241118
Qualified Domestic Relations Orders submitted to PBGC
OMB: 1212-0054
Qualified
Domestic
Relations Orders and PBGC
• Modifying
the Glossary by adding the term“annuity starting date”
and by clarifying the terms “certain-and-continuous annuity”,
“qualified
domestic relations order”, and “spouse”.
• Clarifying
the booklet with editorial changes.
This
edition
of
PBGC’s
booklet
Qualified
Domestic
Relations
Orders
&
PBGC
includes
the
following
changes
from
the
guidance
published in February 2022:
This
booklet
provides
general
information
to
attorneys
and
other
pension
professionals
on
submitting
domestic
relations
orders
to
the
Pension Benefit Guaranty Corporation (PBGC) after PBGC becomes
trustee of a terminated pension plan. It also provides general
information on the procedures PBGC follows to determine whether an
order is a qualified domestic relations order (QDRO) for purposes of
paying benefits under title IV of the Employee Retirement Security
Act of 1974, as amended (ERISA). Under ERISA
§206(d)(3)(G)(ii),
each plan must establish reasonable procedures for determining
whether an order is a QDRO, but plans may differ in
the
procedures
they
establish.
The
procedures
described
in
this
booklet
are
PBGC’s
procedures
and
may
differ
from
procedures
for
plans
that have not been trusteed by PBGC.
The
information summarizes PBGC’s rules at the time that the
booklet was published. It is not intended to give legal advice or to
replace the advice of an attorney. None of this information takes
precedence over legislation, regulations, or specific
interpretations or rulings.
The
model
orders
and
model
language
are
provided
solely
to
assist
individuals
in
preparing
orders
for
submission
to
PBGC,
and
they
cover
only
the
most
common
situations
that
may
need
to
be
addressed
in
a
domestic
relations
order.
PBGC
will
not
condition
its
determination of whether
an
order is a QDRO on the use of any particular
form
or
language.
The
information
does
not
represent
the
government’s
interpretation
of
the
rules
governing
QDROs.
Interpretation
of
those
rules
is
within the jurisdiction of the U.S. Department of Labor (DOL) and
the Internal Revenue Service (IRS).
This
booklet
may
be
obtained
from
PBGC’s
website
at
www.pbgc.gov
or
by
calling
PBGC
at
1-800-400-PBGC
(7242).
(TTY/ASCII
users
may
call the
Federal
Relay
Service
toll-free
at
1-800-877-8339
and
ask
to be connected to this
number.)
For
additional
information,
DOL’s
publication
The
Division
of
Retirement
Benefits
through
Qualified
Domestic
Relations
Orders
is
available
at
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/qdros.pdf
or by calling
the Employee Benefits Security Administration Hotline at
1-866-444-EBSA (3272).
Required
Paperwork
Reduction
Act
Notice
Under
ERISA, no part of an individual’s benefit under a plan
trusteed by PBGC may be assigned to another person
involved
in
a
domestic
relations
proceeding, such
as
a
separation
or
divorce,
unless
PBGC
receives
a domestic relations order and determines it to be a qualified
domestic relations order, or “QDRO.” The model QDROs and
accompanying guidance in PBGC’s booklet, Qualified Domestic
Relations Orders & PBGC, are intended to assist parties by
making it easier to comply with statutory requirements. Under the
Paperwork Reduction
Act,
an
agency
may
not
conduct
or
sponsor,
and
a
person
is
not
required
to
respond
to,
a
collection
of
information
unless
it
displays
a
currently
valid
OMB
control
number.
This
collection
of
information
has
been
approved
by the Office of Management and Budget (OMB) under control number
1212-0054 (expires
0X/XX/2028).
The
information
provided
to
PBGC
may
be
disclosable
under
the
Freedom
of
Information
Act
and
the
Privacy
Act.
PBGC
estimates
that
the
average
burden
of
preparing
a
QDRO
with
the
assistance
of
PBGC’s
booklet
will
be
3/4
hour
of
the
participant’s
or
alternate
payee’s
time
and
$700
in
professional
fees
if
the
participant
or
alternate
payee hires
an
attorney
or
other
professional
to
prepare
the
QDRO.
Comments
concerning
the
accuracy
of
this
estimate
or
suggestions for further reducing this burden may be sent to Pension
Benefit Guaranty Corporation, Office of General Counsel, 445 12th
Street S.W., Washington, DC 20024-2101.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
Contents
Page
I.
II.
PBGC
Model
Separate
Interest
QDRO
PBGC Model Shared Payment QDRO PBGC
Model QDRO Instructions Section
1. Identification of
Plan Section
2. Identification
of Participant and Alternate Payee
Section
3. Amount
of
Benefit
to
Be
Paid
to
the
Alternate
Payee
Section
4. PBGC
Benefit Adjustments
Section
5. Benefits
Start
Section
6. Form
of Benefit
Section
7. Benefits
Stop
Section
8.
Death
of
Participant
Section
9.
Death
of
Alternate
Payee Section
10.
Surviving
Spouse
Rights
of
Alternate
Payee 22
III.
Appendix
A Defined
Benefit
Pension
Plans
and
PBGC
Benefit
Rules Appendix
B Domestic
Relations
Orders
Qualified
Before
PBGC
Becomes
Trustee Appendix
D PBGC
Model Child Support Shared
Payment QDRO Appendix
E PBGC
Model
Treat-As-Spouse
QDRO Appendix
F Language
for
Including
a
Contingent
Alternate
Payee Appendix
G How
to
Obtain
Certain
Participant
Information
from
PBGC
1
The benefits of a pension plan participant
generally may not be assigned or alienated. The law
provides
an
exception
for
domestic
relations
orders
that
relate
to
child
support,
alimony payments,
or
marital
property
rights
of
an
alternate
payee
(a
spouse,
former
spouse,
child,
or
other
dependent
of
a
plan
participant who is recognized by
the order as having a right to receive all, or a portion, of the
participant’s pension benefits under a plan).
The
exception
applies
only
if
the
domestic
relations
order meets specific legal
requirements and the plan administrator determines that it is
qualified, that
is, a qualified domestic
relations order, or “QDRO.” See section 206(d) of ERISA
and related regulations, and section 414(p) of the Internal Revenue
Code of 1986, as amended (Code).
PBGC
reviews a domestic
relations
order that
has been submitted to
PBGC and
must
determine that the order is
qualified before being able to pay benefits to an alternate payee.
The
Pension
Benefit
Guaranty
Corporation
(PBGC)
is
a
federal
agency
that
insures
the
benefits of workers, retirees,
and beneficiaries participating in qualified, private-sector defined
benefit pension
plans.
A
defined
benefit
pension
plan
that
does
not
have
enough
money
to
pay
benefits may
be
terminated
if
the
employer
responsible
for
the
plan
faces
severe
financial
difficulty,
such as bankruptcy, and is
unable to maintain the plan. In such an event, PBGC becomes trustee
of the plan and pays pension plan benefits and the terms of the
applicable plan document, subject to legal limits, to plan
participants and
beneficiaries.1
PBGC’s rules on
benefit amounts and benefit forms payable by PBGC are summarized in
Defined Benefit Pension Plans and PBGC Benefit Rules –
Appendix A.
What
happens on the death of the plan participant and the alternate
payee. A
QDRO should specify whether the alternate payee will be treated as
the participant’s spouse for purposes of any survivor
benefits.
A
QDRO
also
should
specify
what
happens
to
benefits
when
the
participant
or
alternate payee dies, both before and after payments required under
the QDRO commence, and both before and after each other.
PENSION
BENEFIT
GUARANTY
CORPORATION
PBGC
QDRO
Requirements
Identity
of the plan participant, each alternate payee, and each pension
plan. A
QDRO must specify the name,
last
known
mailing
address,
and
Social
Security
Number
of
the
plan
participant
and
each
alternate payee covered by the order. A QDRO also must identify the
name of each plan to which the order applies; this should be each
plan’s legal name.
Amount to be paid and when payments start.
A QDRO must state how much of the
plan participant’s benefit is to be paid to the alternate
payee, such as a dollar amount
or
percentage of the benefit, or
the QDRO must make clear the manner in which the amount is to be
determined. A QDRO also must specify or
allow the alternate payee to
choose when payments to the alternate payee will start.
1
This
booklet
does
not
apply
to domestic
relations
orders
(DROs)
submitted
with
respect
to
benefits
held
under
PBGC’s
Missing
Participants
Program (MPP).
Call PBGC at
800-736-2444 if you have a DRO that you need to submit to the MPP.
2
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
What
a
QDRO
Must
Not
Require
A
QDRO
must
not
require
PBGC
to:
• •
pay
any
benefits
not
permitted
under
ERISA
or
the
Code; provide
any
type
or
form
of
benefit,
or
any
option,
not
otherwise
payable by PBGC with respect to the plan;
pay
benefits
to
the
participant
and
alternate
payee
with
a
total
value
that
exceeds
the
value
of benefits that the participant
would otherwise receive under title IV of ERISA;
pay
benefits
to
the
alternate
payee
when
those
benefits
are
required
to
be
paid
to
another alternate payee under a
QDRO that is in effect prior to the order; pay
benefits
to
the
alternate
payee
for
any
period
before
PBGC
receives
the
order; pay
benefits
as
a
separate
interest
to
the
alternate
payee
if
the
participant
is
already
receiving benefit payments; or change
the
benefit
form
or
change beneficiary
of
a
joint-life
annuity
if
the
participant
is
already receiving benefit
payments.
•
•
• •
•
3
The
PBGC
Model
Separate
Interest
QDRO
may
be
used
only
if
the
participant’s
benefit
payments
have
not
started
when
the
domestic
relations
order
is
submitted
to
PBGC
for
qualification.
The
participant’s
benefit
is
divided
into
two
separate
parts,
with
each
part
providing
the
participant
and
the
alternate
payee
with
his
or
her
separate
interest
in
a
lifetime
annuity.
Unlike
the
PBGC
Model Shared Payment QDRO (see
below), the PBGC Model Separate Interest QDRO gives the
alternate
payee
control
over
the
timing
and
form
of
their benefit
payments.
The
alternate payee may (1) start
their payments before the participant (subject to certain
restrictions), (2)
receive
pension
benefits
over
their
lifetime
rather
than
the
participant’s
lifetime,
and
(3) choose a straight-life
annuity or certain-and-continuous annuity that may provide benefits
to the alternate payee’s beneficiary for
a limited period. The QDRO
may also assign survivor
benefits to the alternate payee, but this assignment is not needed
to ensure that the alternate payee receives benefits for life.
The PBGC Model Shared Payment QDRO may
be used where the plan participant and the alternate
payee
will
“share”
each
benefit
payment.
The
model
may
be
used
regardless
of
whether the
participant
has
started
receiving
benefits.
However,
the
alternate
payee
cannot
begin receiving benefits before
the participant does under this model. The PBGC
Model Shared Payment QDRO must
specify the amount or percentage of the participant’s benefit
payment that is assigned to the alternate payee and the number or
duration of payments to the alternate payee. Payments to the
alternate payee stop as of the earlier of when the participant dies
or stops receiving payments. However,
the
QDRO
may
also
assign
the
alternate
payee
a
right
to
survivor
benefits
or
other benefits available under
the plan.
PBGC has developed two model QDROs for general
use after a defined benefit plan has terminated and
PBGC has
become trustee of the
plan:
a PBGC
Model Separate Interest QDRO and a
PBGC Model Shared Payment QDRO.
(Two additional model QDROs that may be used specifically for child
support or for providing only a surviving spouse benefit are located
in Appendices
D
and
E,
respectively,
and
language
for
including a contingent alternate
payee is located
in
Appendix
F.)
A
QDRO
should
be
clear
as
to
whether
the
alternate
payee
is
to
receive a portion of the actual
benefit payments made to the participant (a shared payment
order)
or
the
value
of
a
separate
portion
of
the
participant’s
retirement
benefit,
where
the
benefit may be paid at a time
and in a form different from that chosen by the participant (a
separate interest order). PBGC’s Model QDROs make this
distinction clear.
PENSION
BENEFIT
GUARANTY
CORPORATION
4
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
PBGC
Model
Separate
Interest
QDRO
(You
may
use
this
model
when
a
defined
benefit
pension
plan
has
terminated,
PBGC
has
become
trustee of the plan, and the parties want PBGC to divide the value
of the participant’s benefit between
the
participant
and
the
alternate
payee.
You
may
use
this
model
only
if
the
participant’s
benefit
payments
have
not
started
when
the
order
is
submitted
to
PBGC
for
qualification. Please
read
the
PBGC
Model
QDRO
Instructions
for
important
information.)
IN
THE COURT
OF
DIVISION COUNTY
IN
RE
MARRIAGE/SUPPORT
OF
: : : : : : : : : :
PETITIONER,
V.
CASE
NO.
PARTICIPANT,
RESPONDENT.
QUALIFIED
DOMESTIC
RELATIONS
ORDER
This Order is intended to be a qualified
domestic relations order (“QDRO”), as that term is
defined
in
section
206(d)
of
the
Employee
Retirement
Income
Security
Act
of
1974,
as
amended (“ERISA”)
and section 414(p) of the Internal Revenue Code of 1986, as amended
(“Code”). This
Order
is
granted
in
accordance
with
[applicable
state
domestic
relations
law
citations],
which relate to marital property rights, child support, and/or
spousal support between spouses or
between
a
spouse
and
a
former
spouse
in
matrimonial
actions.
The
Participant
is
not
currently receiving benefit
payments from PBGC with respect to the plan identified below.
SECTION
1.
IDENTIFICATION
OF
PLAN
This
Order
applies
to
benefits
under
the
[formal
name
of
the plan]
(“Plan”).
The
Pension
Benefit Guaranty Corporation
(“PBGC”) is trustee of the Plan.
5
[If
the
alternate
payee
is
to
receive
a
pro-rata
portion
of
the
participant’s
early
retirement
subsidy, insert the paragraph below. “Pro rata” means a
proportionate allocation to two or
more
parts
based
on
each
part’s
share
of
the
whole.
The
paragraph
below
should
NOT
be included unless the Plan provides a subsidized early retirement
benefit.]
Starting at the time specified in section 5,
PBGC shall pay to the Alternate Payee as a separate interest
an
amount
actuarially
equivalent
to
[all/x%]
of
the
Participant’s
benefit
under
the
Plan. The
Participant’s
benefit
shall
be
determined
as
of
[date
of
separation/date
of
divorce/date
of plan termination/some
other date]. The Alternate Payee’s
separate interest shall be determined as a benefit payable over the
lifetime of the Alternate Payee.
PENSION
BENEFIT
GUARANTY
CORPORATION
SECTION
2.
IDENTIFICATION
OF
PARTICIPANT
AND
ALTERNATE
PAYEE
a.
[Name
of
the
Participant]
is
eligible
to
receive
a
benefit
from
the
Plan
and
is
hereafter
referred to as the
“Participant.” The Participant’s mailing address
is [address]. The Participant’s Social Security Number is
[Social Security Number].
b.
[Name
of
the
Alternate
Payee]
is
hereafter referred
to
as
the “Alternate Payee.” The Alternate Payee’s
mailing address is [address].
The
Alternate Payee’s Social Security Number is [Social
Security
Number].
The
Alternate Payee is the [spouse/former
spouse/child/other
dependent]
of the
Participant.
SECTION
3.
AMOUNT
OF
BENEFIT
TO
BE
PAID
TO
ALTERNATE
PAYEE
The Alternate Payee shall be entitled to a
pro-rata share of any early retirement subsidy provided to
the
Participant.
The
portion
of
the
early
retirement
subsidy
payable
to
the
Alternate
Payee
shall become payable on the date
the Participant commences benefits, but not before.
If the Alternate Payee commences
receiving benefits on an unsubsidized basis before the Participant
retires with an
early
retirement
subsidy,
then
the
amount
payable
to
the
Alternate
Payee
shall
be
increased,
in accordance with PBGC’s
practices and actuarial principles, to provide the Alternate Payee
with
a
pro-rata
share
of
the
early
retirement
subsidy
payable
as
of
the
Participant’s
annuity
starting date. The pro-rata
share of the early retirement subsidy payable to the Alternate Payee
shall be
calculated
in
the
same
manner
as
the
Alternate
Payee’s
share
of
the
Participant’s
retirement benefits is
calculated pursuant to the terms of this Order.
SECTION
4.
PBGC
BENEFIT
ADJUSTMENTS
If
PBGC
adjusts
the
Participant’s
benefit
from
the
benefit
payable
under
the
Plan,
any
reduction
shall be applied by decreasing [pro
rata the value of the Participant’s and the Alternate Payee’s
benefits/the
value
of
the
Participant’s
remaining
benefit
first/the
value
of
the
Alternate
Payee’s
separate
interest
first],
and
any
increase
shall
be
applied
by
increasing
[pro
6
The
Alternate Payee’s annuity starting date shall be [such
future date as the Alternate Payee elects/a future
specified
date].
(This
date
must
be the first
day
of
a
month
and cannot
be
before
the
Participant’s
“earliest
PBGC
retirement
date,”
which
is
defined
in
29 C.F.R.
§4022.10.)
Payment
shall
not
be
made
until
PBGC
qualifies
this
domestic
relations order and receives a
PBGC benefit application from the Alternate Payee.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
rata
the value of the Participant’s and the Alternate Payee’s
benefits/the value of the Participant’s remaining
accrued
benefit/the
value
of
the
Alternate
Payee’s
separate
interest].
“Pro
rata”
means
a
proportionate
allocation
to
two
or
more
parts
based
on
each
part’s
share of the whole.
SECTION
5.
BENEFITS
START
SECTION
6.
FORM
OF
BENEFIT
PBGC
shall
pay
the
Alternate
Payee’s
benefit
in
the
form
elected
by
the
Alternate
Payee
on
the PBGC benefit application.
SECTION
7.
BENEFITS
STOP
PBGC
shall
stop
payments
of
the
Alternate
Payee’s
separate
interest
in
accordance
with
the
form of
benefit
elected
by
the
Alternate
Payee
(or
in
accordance
with
the
automatic
form,
if
applicable).
SECTION
8.
DEATH
OF
PARTICIPANT
The
Participant’s
death
shall
not
affect
payments
of
the
Alternate
Payee’s
assigned
separate interest. Additional
benefits may be payable if the Alternate Payee is designated as the
Participant’s spouse in Section 10.
SECTION
9.
DEATH
OF
ALTERNATE
PAYEE
If
the Alternate Payee dies before commencing benefits, the Alternate
Payee’s separate interest shall [revert
to the Participant/be paid to the Contingent Alternate Payee (see
Language for
Including
a
Contingent
Alternate
Payee
–
Appendix
F)].
If
the
Alternate
Payee
dies
after
commencing
benefits,
see
Section
7,
the
Alternate
Payee’s
death
will
have
no
effect
on
the
benefits
paid to the Participant.
7
[NOTE:
Once a separate interest is qualified, the Alternate Payee’s
rights to benefits for life are guaranteed. In light of this,
survivor benefits need not be provided in a separate interest order
to ensure that the Alternate Payee continues to receive benefits
after the Participant’s death. However, if the parties desire
that an additional amount be payable to the Alternate Payee at the
Participant’s death,
one
or
both
of the following provisions
may
be included. The survivor
benefit
in this case will be based on the benefit to which the Participant
retains a separate interest, not on the entire benefit of the
Participant before it was divided into two separate parts.]
b. PBGC shall treat the Alternate Payee as the
Participant’s spouse for purposes of the Participant’s
qualified
preretirement
survivor
annuity
(QPSA)
for
[none/all/x%]
of
the
benefit to which the Participant
retains a separate interest.
a. PBGC shall treat the Alternate Payee as the
Participant’s spouse for purposes of the Participant’s
qualified
joint-and
survivor
annuity
(QJSA)
for
[none/all/x%]
of
the
benefit to which the Participant
retains a separate interest.
PENSION
BENEFIT
GUARANTY
CORPORATION
SECTION
10.
SURVIVING
SPOUSE
RIGHTS
OF
ALTERNATE
PAYEE
[NOTE:
Section 10 applies only if the Alternate Payee is the spouse or
former spouse of the Participant;
it
does not apply
if
the Alternate Payee is a child or
other
dependent
of
the Participant.]
[NOTE:
When
“X%” is used above, it refers to the portion of the
survivor benefit awarded to the Alternate Payee – not the
automatic survivor percentage of the plan’s QJSA or QPSA
(which is typically 50%). Thus, if the Alternate Payee is awarded
40% of the QPSA benefit and the plan’s automatic
survivor
percentage
for
the
QPSA
is
50%,
then
the
Alternate
Payee
will
receive
20%
of
the
Participant’s benefit as his/her survivor benefit.]
SECTION
11.
OTHER
REQUIREMENTS
Nothing in
this Order
shall
require PBGC:
a.
To
pay
any
benefits
not
permitted
under
ERISA
or
the
Code;
b.
To
provide
any
type
or
form
of
benefit
or
any
option
not
otherwise
payable by PBGC with respect to the plan;
c.
To
pay
benefits
to
the
Participant
and
Alternate
Payee
with
a
total
value
that
exceeds
the
value of the benefits the
Participant otherwise would receive under title IV of ERISA;
d.
To
pay
benefits
to
the
Alternate
Payee
that
are
required
to
be
paid
to
another
alternate
payee under a QDRO that is in
effect prior to this Order;
e.
To
pay
benefits
to
the
Alternate
Payee
for
any
period
before
PBGC
receives
this
Order;
8
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
f.
To
pay
benefits
as
a
separate
interest
to
the
Alternate
Payee
if
the
Participant
is
already
receiving benefit payments; or
g.
To
change
the
benefit
form
or
change the
beneficiary
of
a
joint-life
annuity
if
the
Participant
is
already receiving benefit
payments.
SECTION
12.
RESERVATION
OF
JURISDICTION
The
Court
reserves
jurisdiction
to
amend
this
Order
to
establish
or
maintain
its
status
as
a QDRO under ERISA and the Code.
9
PENSION
BENEFIT
GUARANTY
CORPORATION
PBGC
Model
Shared
Payment
QDRO
(You
may
use
this
model
when
a
defined
benefit
pension
plan
has
terminated,
PBGC
has
become
trustee
of
the
plan,
and
PBGC
is
to
pay
the
alternate
payee
a
portion
of
the
participant’s
monthly
benefit
payments.
You
may
use
this
model
either
before
or
after
the
participant’s
benefit
payments
have started; however, benefit payments to
the
alternate payee cannot start until the participant’s
benefit
payments
have
started.
Please
read
the
PBGC
Model
QDRO
Instructions
for
important information.)
IN
THE COURT
OF
DIVISION COUNTY
------------------------------------------------------------------------------------------------------------------------
- IN
RE
MARRIAGE/SUPPORT
OF
: : : : : : : :
PETITIONER,
V.
CASE
NO.
PARTICIPANT,
RESPONDENT.
:
QUALIFIED
DOMESTIC
RELATIONS
ORDER
This Order is intended to be a qualified
domestic relations order (“QDRO”), as that term is
defined
in
section
206(d)
of
the
Employee
Retirement
Income
Security
Act
of
1974,
as
amended (“ERISA”)
and section 414(p) of the Internal Revenue Code of 1986, as amended
(“Code”).
This
Order
is
granted
in
accordance
with
[applicable
state
domestic
relations
law
citations],
which
relate
to
marital
property
rights,
child
support,
and/or
spousal
support
between
spouses
or
between a spouse and a former spouse in matrimonial actions.
This
Order
applies
to
benefits
under
the
[formal
name
of
the plan]
(“Plan”).
The
Pension Benefit Guaranty
Corporation (“PBGC”) is trustee of the Plan.
10
The
Alternate Payee’s earliest allowable commencement date shall
be [such
future date as the alternate payee elects/the date when PBGC will
start payments to the Participant/another future date].
(This
date
must
be
the
first
day
of
a
month
and cannot be earlier
than the
later
of
the
date
PBGC
receives
this
domestic
relations
order
and
the
Participant’s
annuity
starting
date.)
Payment
shall not be made until PBGC qualifies this domestic relations order
and receives a PBGC benefit application from the Alternate Payee.
a.
[Name
of
the
Participant]
is
eligible
to
receive
a
benefit
from
the
Plan
and
is
hereafter
referred
to as the “Participant.”
b.
The
Participant’s
mailing
address
is
[address].
The
Participant’s
Social
Security
Number
is [Social
Security
Number].
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
SECTION
2.
IDENTIFICATION
OF
PARTICIPANT
AND
ALTERNATE
PAYEE
c.
[Name
of
the
Alternate
Payee]
is
hereafter
referred
to
as
the
“Alternate
Payee.”
The
Alternate
Payee’s
mailing
address
is
[address].
The
Alternate
Payee’s
Social
Security
Number
is
[Social
Security
Number].
The
Alternate
Payee
is
the
[spouse/former
spouse/child/other dependent]
of
the Participant.
SECTION
3.
AMOUNT
OF
BENEFIT
TO
BE
PAID
TO
ALTERNATE
PAYEE
a.
Starting
at
the
time
specified
in
section
5,
PBGC
shall
pay
to
the
Alternate
Payee
[$x/x%]
of each of the Participant’s
monthly benefit payments.
b.
OPTIONAL:
When [insert
future event] occurs
and
PBGC
is notified in
writing,
PBGC shall
[increase/decrease]
the
amount
paid
to
the
Alternate
Payee
from
each
of
the
Participant’s
monthly
benefit payments to [$x/x%].
SECTION
4.
PBGC
BENEFIT
ADJUSTMENTS
If
PBGC
adjusts
the
Participant’s
benefit
from
the
benefit
payable
under
the
Plan,
any
reduction
shall
be
applied
by
decreasing
[pro
rata
the
Participant’s
and
the
Alternate
Payee’s
benefits/the
Participant’s
benefit
first/the
Alternate
Payee’s
benefit
first],
and
any
increase
shall
be
applied
by
increasing
[pro
rata
the
Participant’s
and
the
Alternate
Payee’s
benefits/the
Participant’s
benefit/the
Alternate
Payee’s
benefit].
“Pro
rata”
means
a
proportionate
allocation
to
two
or
more
parts based on each part’s share of the whole.
SECTION
5.
BENEFITS
START
11
b.
PBGC
shall
treat
the
Alternate
Payee
as
the
Participant’s
spouse
[[for
purposes
of
[none/all/X%]
of
any
qualified
preretirement
survivor
annuity
(QPSA)
that
becomes
Except
for any survivor benefits described in section 10, PBGC shall make
payments to the Alternate
Payee
until
the
[earlier
of
the
Participant’s
or
Alternate
Payee’s
death/earlier
of:
the
Participant’s
or
Alternate
Payee’s
death,
a
specific
date,
or
the
date
PBGC
is
notified
in writing of the occurrence of [insert specific event]].
PENSION
BENEFIT
GUARANTY
CORPORATION
SECTION
6.
FORM
OF
BENEFIT
The
Alternate
Payee
shall
not
have
the
right
to
elect
a
form
of
benefit.
The
amount
paid
to
the Alternate Payee will be
determined by the benefit form elected by the Participant.
SECTION
7.
BENEFITS
STOP
SECTION
8.
DEATH
OF
PARTICIPANT
Except for any survivor benefits described in
section 10, if the Participant dies before the Alternate
Payee,
the
Alternate
Payee
is
not
entitled
to
any
payments
as
of
the
first
of
the
month following the
Participant’s death.
SECTION
9.
DEATH
OF
ALTERNATE
PAYEE
If
the Alternate Payee dies before the Participant, the shared payment
shall [revert
to the Participant/be
paid
to
the
Contingent
Alternate
Payee
(see
Language
for
Including
a
Contingent Alternate Payee—Appendix F)].
SECTION
10.
SURVIVING
SPOUSE
RIGHTS
OF
ALTERNATE
PAYEE
[NOTE:
Section
10
applies
only
if
the
Alternate
Payee
is
the
spouse
or
former
spouse
of
the
Participant;
it
does
not
apply
if
the
Alternate
Payee
is
a
child
or
other
dependent
of
the
Participant.]
[NOTE:
Survivor
benefit
may
be
assigned to the
Alternate
Payee
only
if
the Participant
is
not
already
receiving benefits.]
a.
PBGC shall treat the Alternate Payee as the Participant’s
spouse [[for
purposes of [none/ all/X%]
of
any
qualified
joint-and-survivor
annuity
(QJSA)
that
becomes
payable
under
the
Plan
with
respect
to
the
Participant]
OR
[to
the
extent
of
Participant’s
benefit
assigned to the Alternate Payee under Section 3 above.]]
12
[NOTE:
When “X%” is used above, it refers to the portion of the
survivor benefit awarded to the Alternate Payee – not the
automatic survivor percentage of the plan’s QJSA or QPSA
(which is typically 50%). Thus, if the Alternate Payee is awarded
40% of the QPSA benefit and the plan’s automatic
survivor
percentage
for
the
QPSA
is
50%,
then
the
Alternate
Payee
will
receive
20%
of
the
Participant’s benefit as his/her survivor benefit.]
payable
under the Plan]
OR
[to
the
extent
of
Participant’s
benefit
assigned
to
the
Alternate
Payee
under
Section 3 above.]
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
SECTION
11.
OTHER
REQUIREMENTS
Nothing in
this Order
shall
require PBGC:
a.
To
pay
any
benefits
not
permitted
under
ERISA
or
the
Code;
b.
To
provide
any
type
or
form
of
benefit
or
any
option
not
otherwise
payable by PBGC with respect to the
Plan;
c.
To
pay
benefits
to
the
Participant
and
Alternate
Payee
with
a
total
value
that
exceeds
the
value of the benefits the
Participant otherwise would receive under title IV of ERISA;
d.
To
pay
benefits
to
the
Alternate
Payee
that
are
required
to
be
paid
to
another
alternate
payee under a QDRO that is in
effect prior to this Order;
e.
To
pay
benefits
to
the
Alternate Payee for
any
period
before
PBGC receives this Order; or
f.
To
change
the
benefit
form
or
change the
beneficiary
of
a
joint-life
annuity
if
the
Participant
is
already receiving benefit
payments.
SECTION
12.
RESERVATION
OF
JURISDICTION
The
Court
reserves
jurisdiction
to
amend
this
Order
to
establish
or
maintain
its
status
as
a QDRO under ERISA and the Code.
13
Insert the formal name of the plan covered by
this Order (i.e., the full name as stated in plan documents).
PBGC
will
determine
whether
an
order
is
qualified
only
for
plans
specifically
named and for which PBGC is the
trustee. If the participant participated in more than one pension
plan, the parties are
responsible for ensuring that each plan subject to the order is
properly identified.
PENSION
BENEFIT
GUARANTY
CORPORATION
PBGC
Model
QDRO
Instructions
The following information on completing the
PBGC Model Separate Interest QDRO
and Model
Shared Payment QDRO discusses each
provision separately, but all the provisions work together. The time
that benefit payments start and stop can affect the amount of
benefits the participant and the alternate payee will receive.
Similarly, the form of benefit payments – whether benefits are
paid
as
a
straight-life
annuity
or
as an
annuity
with
survivor
benefits
–
can
affect
the
amount
of benefits the parties will
receive.
The models are drafted assuming one plan and
one alternate payee. If the domestic relations order (Order) is
intended to cover more than one PBGC-trusteed plan or more than one
alternate payee, the Order should be clear as to which plan and
alternate payee each provision is
addressing.
The
preferred
way
of
doing
this
is
to
repeat
sections
1
through
10
as
necessary
for each plan.
INTRODUCTORY
PARAGRAPH
Insert
the
applicable
state
domestic
relations
law
citations.
SECTION
1.
IDENTIFICATION
OF
PLAN
SECTION
2.
IDENTIFICATION
OF
PARTICIPANT
AND
ALTERNATE
PAYEE
(a)
Insert
the name, mailing
address
and
Social
Security
Number
of the
participant.
(b)
Insert
the
name,
mailing
address
and
Social
Security
Number
of
the
alternate
payee.
Specify the relationship
(spouse/former spouse/child/other dependent) of the alternate payee
to the participant.
NOTE:
Documents
filed
in
state
courts
may
be
made
available
to
the
public.
To
protect
the
privacy
of
the
parties,
the
participant’s
and
alternate
payee’s
Social
Security
Numbers
may
be
provided
to PBGC
in a separate document that has not been submitted to the court. If
you choose to provide the information to PBGC in this way, note on
the Order that this information is in a separate document.
The
Order should be clear on the identity of the participant and the
alternate payee. PBGC uses
Social
Security Numbers provided to identify the participant’s and
alternate payee’s records within PBGC, to report income for
tax purposes, and to respond to lawful requests for information from
other individuals and entities. If an alternate payee is a minor or
legally incompetent, the Order must include
14
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
the
name
and
address
of
the
guardian,
other
legal
representative,
or
state
agency
to
whom
PBGC
will
send payments on behalf of the minor or legally incompetent person
(see language in section 2.b. of the PBGC Model Child Support Shared
Payment QDRO—Appendix D).
SECTION
3.
AMOUNT
OF
BENEFIT
TO
BE
PAID
TO
ALTERNATE
PAYEE
Insert
the
flat
dollar
amount
or
percentage
of
the
participant’s
benefit
that
the
alternate
payee
is to receive. Also insert the
date as of which the benefit is to be determined, if applicable.
The Order must specify how much of the
participant’s benefit the alternate payee will receive.
Because
the
participant
often
does
not
know
the
specific
amount
that
will
be
paid
at
retirement, this can be
difficult for the Order to address and for PBGC to interpret. The
assistance of an
actuary may be helpful in making these complex determinations.
Information about the participant’s
benefit
under
a
plan
trusteed
by
PBGC
may
be
obtained
by
a
prospective
alternate payee (or their
guardian) by requesting this information from PBGC (see How to
Obtain Certain Participant Information from PBGC—Appendix G).
PBGC has found there is less confusion with an
Order that states a specific percentage of the benefit
(for
Separate
Interest
QDROs)
or
specific
percentage
or
dollar
amount
of
the
monthly benefit (for Shared
Payment QDROs), and the models are drafted with that approach. If,
instead, the parties choose to include a formula, PBGC will treat
the domestic relations order as qualified only if it can determine
the benefit under
the formula based on the
information in the Order. The Order
must
include any information that
would be necessary
to determine the benefit
assigned and,
where
applicable, the period during
which it is to be
paid (for
example, a child’s birth
date if the benefit stops when the child attains a certain age).
Neither
type
of
Order
can
provide
for
payments
to
the
alternate
payee
to
be
payable
as
of
a
date before
PBGC
receives
the
domestic
relations
order,
but
the
Shared
Payment
QDRO
can
increase the monthly payment
amount to the alternate payee (and decrease the monthly payment to
the participant by the same amount) for a specified period.
There
are
many
ways
an
Order
can
specify
the
portion
or
value
of
a
benefit
or
pension
payment that the alternate payee
is to receive under the Order.
NOTE:
The dollar amount or percentage can be based on the participant’s
entire benefit or payment, or
just
on the part of the benefit or
payment
earned during the marriage and/or up to a specified date.
The
PBGC
Model
Separate
Interest
QDRO
provides
that
the
alternate
payee
will
receive
a
benefit that is the actuarial
equivalent of a specified portion of the benefit that the
participant has earned as of a given date (see below), typically as
a percentage of the participant’s benefit (for example, 50% of
the participant’s benefit). An order may also assign a
specific dollar amount payable to the alternate payee.
15
Carol
is the plan participant and is age 40; Mark is age 35. Their QDRO
provides that Mark will receive a separate interest that is
actuarially equivalent to 50% of Carol’s pension benefit at
the date of divorce. Carol’s benefit at the date of divorce in
the form of a straight-life annuity with payments
beginning
at her age 65 is $600
per
month. Mark’s
50%
interest
in
Carol’s
benefit
has
a
value
that
is
actuarially
equivalent
to
a
life
annuity
$300
($600
x
50%) per
month
to
Carol
beginning
at
her
age
65.
PENSION
BENEFIT
GUARANTY
CORPORATION
However,
when
a
separate
interest
order
assigns
a
specified
dollar
amount
to
an
alternate
payee and benefit adjustments
are subsequently necessary, the effect of the benefit adjustment on
the amounts apportioned to each party may result in the parties
receiving benefits that were
unintended
by
the
parties.
The
number
of
factors
that
go
into
the
calculation
of
the
participant’s and
alternate
payee’s
benefits
under
a
separate
interest
order
(including
the
plan’s
early
retirement factors (if
applicable), the ages of the participant and alternate payee at the
time the alternate payee’s
benefit
payments
begin;
and
the
form
elected
by
the
alternate
payee)
may
make
it
difficult to know what each
party will receive if a specified dollar amount is assigned and
needs to be adjusted. (See Section 4 – PBGC Benefit
Adjustments.)
NOTE:
In a Separate Interest QDRO, the sum of the values of the
participant’s portion and the alternate
payee’s
portion
cannot
exceed
the
total
value
of
the
benefit
PBGC
would
have
paid
the participant assuming there was no Order.
The
PBGC
Model
Shared
Payment
QDRO
provides
that
the
alternate
payee
will
receive
a
portion of each of the
participant’s
benefit payments on
or after the date the
participant starts benefit payments. It allows the alternate
payee’s portion to
increase
or decrease
at a specified time or upon a
specified event. The Order must specify the amount and timing of any
change.
NOTE:
In
a
Shared
Payment
QDRO,
the
sum
of
the
portions
paid
to
the
participant
and
to
the
alternate payee cannot exceed the total amount that PBGC would have
paid the participant assuming there was no Order.
A Separate Interest QDRO must specify the date
as of which the alternate payee’s portion of the participant’s
benefit is to be determined. Typically, for domestic relations
orders issued after PBGC trustees a plan, the division of benefits
is based on the participant’s benefit as of the date: of
marital separation, of divorce, or
of plan
termination (in plans trusteed
by PBGC, all benefit accruals will have ceased no later than the
date the plan terminated). The choice of the determination date (for
example, at the date of marital separation or divorce) can have a
significant
effect
on
the
benefit
amount
assigned
to
the
alternate
payee
and
the
benefit
amount retained by the
participant.
Example
1
–
Separate
Interest
QDRO.
Mark
is younger than Carol, so a benefit of $300 per month to Carol at
age 65 generally will provide a different monthly benefit for Mark
depending upon when he starts. Mark’s actual monthly life
annuity payments
will
depend
on
his
age
when
he
starts
benefit
payments,
actuarial
factors,
and
the
benefit
form he
elects.
16
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
Most
pension
plans
provide
for
“normal
retirement”
at
age
65
(or,
if
later,
the
fifth
anniversary of the date the
participant
commenced participation under
the plan).
Many plans
allow “early retirement”
at
some
younger
age,
often
in
combination
with
a
specified
amount
of
service
with
the
employer-for
example,
at
age
60
with
at
least
20
years
of
service.
Some
plans
actuarially
reduce the early retirement
benefit to reflect the longer payout-for example, if the benefit
would be
$1,000 per month
starting
at age
65, it
might be
reduced to $650
per month
starting
at age
60.
Other plans may not reduce the benefit at
all-for example, paying the same $1,000 per month starting
at
age
60
as
the
participant
would receive
starting
at
age
65.
This
kind
of early
retirement benefit is referred
to as a “fully-subsidized” early retirement benefit,
because the participant’s benefit
is
not
reduced
even
though
it
will
cost
the
plan
more
due
to
the
earlier
starting
date.
(The benefit
would
be
considered
“partially
subsidized”
if
the
benefit
were
reduced,
but
not
as
much
as would
be
necessary
to
make
it
equal
in
value
to
the
benefit
that
would
be
paid
starting
at
age
65.)
A Separate Interest QDRO may be written so as
to provide (or not provide) the alternate payee with all or part of
the value of an early retirement subsidy payable under the plan upon
the participant’s commencement of benefits before the
participant’s normal retirement age. It may specify
that
PBGC
will
provide
a
“pro
rata”
share
of
the
early
retirement
subsidy
(here
“pro
rata” means
a
proportionate
allocation
to
two
or
more
parts
based
on
each
part’s
share
of
the
whole)
or a different portion of the
early retirement subsidy to the alternate payee.
NOTE:
If the Separate Interest QDRO is silent with respect to whether the
alternate payee is to receive any portion of the participant’s
early retirement subsidy, PBGC will pay the entire subsidy to the
participant. Moreover, if the participant has not yet commenced
benefits at the time the alternate
payee
elects
to
commence
benefits
under
a
Separate
Interest
QDRO
and
if
the
alternate payee
commences benefits before the participant’s normal retirement
age, then the alternate payee cannot receive any portion of
the
early retirement subsidy
unless
and until the participant commences benefits before the
participant’s normal retirement age. Thus, if the participant
retires on or after the participant’s normal retirement age,
no portion of an early retirement subsidy is payable at all from the
plan, either to the participant or the alternate payee, regardless
of whether the alternate payee commenced benefits before the
participant’s normal retirement age or whether all or a
portion of the early retirement subsidy was awarded to the alternate
payee.
Under the PBGC
Model Shared Payment QDRO, if the
alternate payee receives a percentage share of
the
participant’s
benefit,
the
alternate
payee’s
benefit
will
automatically
include
a
portion of
the early retirement subsidy if
the participant retires early.
The
PBGC
Model
Shared
Payment
QDRO
provides
that
a
specific
amount
or
a
percentage
of
each of the participant’s
monthly benefit payments is paid directly to the alternate payee
(for example, $400 per month, or 25% of each monthly benefit
payment). The combined benefit payments to the participant
and the alternate payee under a
Shared Payment QDRO equal the benefit that would be paid to the
participant assuming there was no QDRO.
17
Continuing
with
the
facts
provided
in
Example
1,
assume
Carol,
the plan participant,
earned
benefits
under
the
plan
for
ten years and was married to Mark for five of those years. If their
QDRO applied the marital fraction method to Mark’s
50%
separate
interest,
Mark’s
50%
interest
would
be
multiplied
by
the
marital
fraction
of
5/10.
Thus, Mark’s pension would be actuarially equivalent to the
value of a straight-life annuity of $150 ($600 x 50% x 5/10) per
month payable to Carol beginning at her age 65. (If Mark and Carol
had been married 12 years,
and
Carol
had
earned
benefits
for
ten
of
those
years,
the
marriage
fraction
would
have
been
10/10,
or
1.
Mark
would
receive
a
benefit
actuarially
equivalent
to
50%
of
Carol’s
benefit.)
Example
3
–
Marital
Fraction
Method
(Separate
Interest
QDRO).
NOTE:
If this method is used, the parties should carefully check the
formula for accuracy and confirm that it provides the benefits they
intend, especially if the order states period of service (for
example, the number of months). For example,
if
PBGC’s
records
indicate
that
the
participant
earned
benefits
under
the
plan
for
126
months
and the order uses 100 months, PBGC may disqualify the
order
or seek clarification from the parties.
In calculating the amount or percentage to be
given to the alternate payee under a QDRO, the parties frequently
will consider the portion of the participant’s benefit that
was earned during the time the alternate payee and the participant
were married. Under this method, the alternate payee’s
portion
of
the
participant’s
benefit
(for
example,
50%)
would
be
multiplied
by
a
fraction, the numerator of which
is the period of service (for example, the number of months) that
the participant earned benefits under the plan during the parties’
marriage, and the denominator of which is the total period of
service (for example, the number of months) that the participant
earned benefits under the plan. This method of allocating the
benefit is sometimes referred to as the marital portion or marital
fraction method, and it can be used for both shared payment and
separate interest QDROs.
A
QDRO
provides
Dick’s
former
spouse,
Jane,
with
25%
of
each
of
his
monthly
pension
payments
once his
payments
start.
Dick
begins
receiving
his
benefits
at
age
65,
and
his
monthly
payments
are $900
per
month
in
the
form
of
a
straight-life
annuity.
Jane’s
portion
of
Dick’s
payment
will
be
$225
per
month
($900
x
25%
=
$225).
Under
the
QDRO,
Jane
will
receive
$225
per
month
for
Dick’s
lifetime
and
Dick
will
receive
$675
per
month
($900
-
$225).
PENSION
BENEFIT
GUARANTY
CORPORATION
Example
2
–
Shared
Payment
QDRO.
SECTION
4.
PBGC
BENEFIT
ADJUSTMENTS
Insert the method for apportioning any
adjustments PBGC makes in benefits. Because the parties
may
wish
to
handle
benefit
increases
and
decreases
differently,
the
models
include
separate sentences for each.
After trusteeing a plan, PBGC may reduce
benefits as necessary to meet the limitations established
by
ERISA
(see
Defined
Benefit
Pension
Plans
and
PBGC
Benefit
Rules—Appendix A). PBGC
pays estimated benefits until it has completed its work on the plan
and determined final
benefits.
In
some
cases-especially
in
plans
with
benefits
that
exceed
PBGC
guarantee
limits
18
Indicate the date as of which the alternate
payee’s benefit payments should begin. The models allow for
benefits to begin as of a specific future date, or a future date
elected by the alternate payee. The alternate payee’s benefit
start date will depend in part on the participant’s “earliest
PBGC
retirement
date”
(benefits
cannot
begin
before
the
participant’s
earliest
PBGC
retirement date)
and
whether
the
participant
has
begun
receiving
benefits
at
the
time
the
order
is
submitted to PBGC for
qualification. The PBGC Model
Separate Interest QDRO may not be
used if the participant
already
is
receiving
benefit
payments.
The
PBGC
Model
Shared
Payment
QDRO
does not allow the alternate
payee’s payments to begin until the participant starts
receiving benefits.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
or
that
have
complex
benefit
structures-final
benefit
amounts
will
differ
from
the
estimated payment amounts paid
by PBGC.
In general, if a QDRO awards a fixed
percentage of the participant’s benefit payment to the
alternate payee and provides no guidance on apportioning any benefit
adjustments made by PBGC between the participant and alternate
payee, PBGC will actuarially adjust
their benefits pro
rata.
“Pro
rata”
means
a
proportionate
allocation
to
two
or
more
parts
based
on
each
part’s share of the whole.
For example, assume a plan benefit of $2,000
per month. An alternate payee is awarded 40% ($800 per month) of the
participant’s benefit. The participant’s remaining
benefit
is 60% of the original plan
benefit ($1,200 per month). Absent a QDRO, assume that PBGC must
reduce
the original plan benefit by
$200 per month as a result of the maximum insurance limitation,
the phase-in limitation, and
other legal limitations. PBGC
generally reduces plan benefits on an actuarially equivalent basis.
Thus, if the QDRO specified that the reduction would be applied pro
rata,
then
PBGC
would
pay
the
participant 60%
of
the
reduced
benefit
(actuarially
adjusted for the participant’s
benefit) and would pay the alternate payee 40% of the reduced
benefit (actuarially adjusted for the alternate payee’s
benefit). Therefore, the alternate payee’s original awarded
benefit would be reduced by $80 (40% of $200) per month to reflect
PBGC’s legal limitations. Similarly, the benefit remaining to
the participant would be reduced by $120 (60%
of
$200)
per
month.
Note
that
with
separate
interest
orders
the
alternate
payee’s
and
participant’s benefits
will
actuarially
reflect
the
benefit
commencement
date,
duration
of
the
benefit
payments, the elected benefit
form, etc.
If a QDRO awards a fixed-dollar amount of the
participant’s benefit to the alternate payee with no
additional guidance, PBGC will first increase or decrease the
participant’s benefit to reflect PBGC’s adjustment. PBGC
will not adjust the fixed-dollar amount awarded to the alternate
payee for an increase and will reduce the alternate payee’s
fixed-dollar amount only if the total decrease
to
be
made
exceeds
the
participant’s
benefit.
Because
any
adjustments
where
fixed-dollar amounts have been
awarded will first be applied to the participant’s benefit,
adjustments may affect the participant’s benefit in ways that
were not intended by the parties.
SECTION
5.
BENEFITS
START
19
The PBGC Model
Shared Payment QDRO provides the
alternate payee with a portion of the participant’s benefit
payments during the period that the participant receives benefits.
If the participant is already receiving benefit payments, the
alternate payee under the QDRO may begin
receiving
benefits
once
PBGC
qualifies
the
order
and
the
alternate
payee
submits
a
benefit application. (In
general, benefits would be payable retroactive to the date PBGC
received the original signed order
or
a
certified
or
authenticated
copy
unless
a
later
date
was
provided for in the QDRO or
unless the alternate payee requests a later date to begin receiving
benefits from PBGC.) If the participant has not begun receiving
benefit payments, the alternate payee may not begin receiving
payments until the participant does.
Continuing
with Example 1, the Separate Interest QDRO allows Mark to start his
benefit payments without regard to when Carol’s benefit
payments actually start. For example, Mark may want to begin
receiving benefit payments as early as age 50, which is when Carol
would be 55 years old. (Assume Carol’s “earliest PBGC
retirement date” is 55. If Carol’s EPRD were instead 60,
Mark couldn’t start receiving
benefits
until
he
was
55.)
If
Mark
and
Carol
had
used
a
Shared
Payment
QDRO
and
Carol
did
not
begin
receiving
benefits
until
age
65
(normal
retirement
age
under
the
plan),
Mark
would
not
be
able to
begin
receiving
benefit
payments
until
Carol
did.
Example
4.
The “earliest PBGC retirement date”
has a specific meaning for PBGC purposes and is defined in PBGC
regulation 29 C.F.R. §4022.10. Typically, a participant’s
age as of their
“earliest
PBGC
retirement
date”
(EPRD)
will
be
55
unless
(1)
under
the
plan’s
terms,
the participant
cannot
receive
a
benefit
until
a
later
age,
or
(2)
PBGC
determines
under
a
facts-and- circumstances test
that the participant could retire earlier than 55. PBGC tells each
participant what their EPRD is in a benefit determination.
The
PBGC
Model
Separate
Interest
QDRO
permits
the
alternate
payee
to
specify
a
future
date that his or her benefit
payments will start or to choose a starting date at some later time.
The Order can be written to allow the alternate payee to begin
receiving payments independently of
when
the
participant
begins
receiving
benefits,
but
payments
to
the
alternate
payee
may
not begin
before
the
participant’s
“earliest
PBGC
retirement
date.”
Payments
to
the
alternate
payee must begin no later than
the date the participant is required to begin payments under section
401(a)(9)
of
the
Code
(see
QDRO
Tax
Rules—Appendix
C).
The
alternate
payee’s
benefit
will
be actuarially adjusted to
reflect the alternate payee’s age at commencement and also for
form of benefit.
PENSION
BENEFIT
GUARANTY
CORPORATION
Example
5.
Continuing
with
Example
2,
PBGC
will
not
begin
paying
benefits
to
Jane
of
$225
per
month
under
the Shared
Payment
QDRO
until
the
time
that
Dick
begins
receiving
his
benefit
payments
of
$675
a
month.
20
A
straight-life
annuity
pays
benefits
only
for
the
lifetime
of
the
alternate
payee;
no
payments
are made after the alternate
payee dies. A certain-and-continuous annuity guarantees payments for
the longer of the alternate payee’s life or the period certain
that is selected. If the alternate payee dies before the end
of
the
period
certain,
payments
are
made
to
their
beneficiary
for
the
rest
of
the
period certain. If the alternate
payee dies after the end of the period certain, no further payments are
made.
The
alternate
payee
selects
their
form
of
benefit
when
applying
to
PBGC
for
benefits.
If
the
alternate payee selects a
certain-and-continuous
annuity, the
alternate
payee
must designate a beneficiary who will receive the remaining payments
if the alternate payee dies while receiving payments, but prior
to
the
end
of
the
period
certain.
Parties
or
their
representatives
should
contact
PBGC
before
providing for
any
other benefit form in
an
Order
to
make certain it is a
form
that
PBGC pays.
Continuing
with Example 1, the Separate Interest QDRO will allow Mark to apply
to PBGC to receive benefits
as
a
straight-life
or
a
certain-and-continuous
annuity.
As
explained
above,
the
amount
of
Mark’s
monthly
benefit is actuarially adjusted to reflect his life expectancy at
the date payments begin. In addition, the amount of his monthly
benefit is affected by the benefit form he selects. No matter what
benefit form
he
selects,
his
benefit
must
have
the
same
value
as
a
$300-per-month
benefit
payable
to
Carol
over
her
lifetime
beginning
at
her
age
65.
If
Mark
chooses
a
straight-life
annuity,
no
further
payments
will
be
made
after
Mark dies. If he chooses to receive a certain-and-continuous
annuity, an annuity that guarantees benefits for the longer
of
his
life
and
the
period
certain,
his
monthly
benefit
will
be
less.
If
Mark
chooses
a
ten-year certain-and-continuous
annuity
and
dies
after
seven
years,
his
designated
beneficiary
will
receive
three
years
of
payments
in
the
same
amount
Mark
had
been
receiving.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
SECTION
6.
FORM
OF
BENEFIT
Generally,
if
an
Order
is
issued
after
PBGC
becomes
trustee
of
a
plan,
the
forms
that
PBGC
will allow the alternate payee
to
choose pursuant to the PBGC
Model Separate
Interest QDRO are
a straight-life annuity
for the life of the alternate
payee or a
certain-and-continuous annuity with a five-year, ten-year, or
fifteen-year period certain.
NOTE:
Because
benefits
under
a
certain-and-continuous annuity
are
guaranteed
to
be
paid
for
at
least
the
period
certain,
monthly payments under a certain-and-continuous annuity will be less
than they would be if the alternate payee had selected a
straight-life annuity.
Example
6.
In the PBGC
Model Shared Payment QDRO, if the
participant is receiving benefit payments, the Order cannot change
the form of benefit payments elected by the participant. However, if
the participant
is
not
yet
receiving
payments,
the
Shared
Payment
QDRO
(like
the
Separate
Interest QDRO)
can
provide
surviving
spouse
benefits
and
thus
affect
the
form
of
benefit
payment
that the participant can elect.
For example, section 10 of either model QDRO can provide that the
participant’s former spouse, as the alternate payee, will be
treated as the participant’s surviving
21
The PBGC Model
Separate
Interest QDRO provides
that
PBGC will pay the separate
interest to the alternate payee
regardless of when the participant dies. (The alternate payee will
receive additional
monthly
payment
amounts
to
the
extent
the
alternate
payee
is
to
be
treated
as
the surviving spouse under
section 10.)
spouse based on all or a portion of the
participant’s benefit. If the Order so provides for the
portion of the benefit for which the alternate payee is treated as
the spouse, the participant cannot choose a form of benefit other
than a qualified joint-and-survivor annuity with the alternate
payee
as
the
beneficiary
without
the
alternate
payee’s
consent
at
the
time
the
pension
is to begin. If under the Shared
Payment QDRO the participant is receiving a certain-and-continuous
annuity and the participant dies during the certain period, payments
to the alternate payee end unless the alternate payee is the named
beneficiary to receive benefits under the certain period.
PENSION
BENEFIT
GUARANTY
CORPORATION
Example
7.
Continuing
with
the
Shared
Payment
QDRO
in
Example
2,
PBGC
will
begin
paying
Jane’s
portion
of
Dick’s
benefit
no
earlier
than
the
time
that
Dick
begins
receiving
his
benefit
payments.
If
the
QDRO
gives Jane surviving spouse rights, Dick must elect a qualified
joint-and-survivor annuity with Jane as beneficiary, unless Jane
consents to Dick’s waiver of the qualified joint-and-survivor
annuity. If the QDRO does
not
give
Jane
surviving
spouse
rights,
Dick
can
elect
any
form
of
payment
provided
to
participants by
PBGC.
SECTION
7.
BENEFITS
STOP
The
time
when
benefits
stop
for
the
alternate
payee
generally
is
governed
by
the
form
elected
in
the
PBGC benefit application.
Once
benefit
payments
to
the
participant
or
the
alternate
payee
have
started,
the
form
of
benefit will govern when
benefits stop. Under the PBGC Model
Shared Payment QDRO, payments to an
alternate payee will stop on the earliest of the (1) death of the
participant, (2) the death of the alternate payee, or (3)
the occurrence of a specified
date or event, such as the
remarriage of the alternate
payee or the date a child attains a certain age. Parties must notify
PBGC in writing when an event occurs that affects the benefit.
Under the PBGC
Model Separate Interest QDRO,
payments to an alternate payee generally stop upon the death of the
alternate payee. But if the alternate payee elected a benefit form
under which a designated
beneficiary could be paid (for
example, a certain-and-continuous annuity), the
form of benefit will govern
whether the beneficiary will be paid and for how long.
SECTION
8.
DEATH
OF
PARTICIPANT
Indicate
what
happens
to
payments
when
the
participant
dies.
22
Continuing
with the Shared Payment QDRO in Example 2, suppose that Dick retires
and begins receiving his pension benefits as a ten-year
certain-and-continuous annuity rather than a straight-life annuity.
Dick
and Jane’s child is the designated beneficiary of Dick’s
certain-and-continuous annuity. Jane receives a 25% share
of
Dick’s benefit payments. Two years after commencing benefit
payments, Dick dies. Dick’s benefit payments
to
Jane
stop
upon
Dick’s
death.
However,
payments
to
their
child,
the
designated
beneficiary,
would
then
commence
equal
to
100%
of
Dick’s
benefit
payment
and
continue
for
eight more
years
until
the
end of the ten-year period certain.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
The PBGC Model
Shared Payment QDRO provides that
payment of a benefit, if any, to an
alternate payee stops no later
than the death of the participant (except to the extent that the
alternate
payee
is
to
be
treated
as
the
surviving
spouse
under
section
10
or
the
alternate
payee
is
a named beneficiary under a
certain-and-continuous annuity).
Example
8.
SECTION
9.
DEATH
OF
ALTERNATE
PAYEE
Indicate
what
happens
when
the
alternate
payee
dies.
In
the
PBGC
Model
Separate
Interest
QDRO,
the
QDRO
may
provide
that
if
the
alternate
payee dies before commencing
benefits, the alternate payee’s benefit may be paid to a
contingent alternate payee.
A contingent alternate payee must satisfy the
definition of an alternate payee under ERISA. Therefore, the Order
must identify that the contingent alternate payee is the
participant’s spouse, former spouse, child or other dependent.
(See Language for Including a Contingent Alternate Payee—Appendix
F). If the alternate payee’s separate interest is paid to a
contingent alternate payee, the separate interest benefit will be
actuarially adjusted to reflect the contingent alternate
payee’s
age.
Alternatively,
the
QDRO
may
provide
that
if
the
alternate
payee
dies
before commencing benefits, the
alternate payee’s separate interest reverts to the
participant. If the QDRO
is
silent
on
what
happens
if
the
alternate
payee
dies
before
commencing
benefits,
PBGC will treat the separate
interest as reverting to the participant. If the alternate payee’s
separate interest
would
revert
to
the
participant
but
the
participant
is
not
alive
at
the
time of
the
alternate payee’s death,
no benefits are payable.
A
benefit
“commences”
for
purposes
of
this
Section
on
the
alternate
payee’s
annuity
starting
date. The annuity starting date
is a date selected by the alternate payee when applying for
benefits, or another date on which benefits must commence under the
QDRO, under the Plan, or by law.
If the alternate payee dies after benefits
commence, the benefit form elected in the alternate payee’s
benefit
application
(or
the
automatic
form,
if
applicable)
will
govern.
For
example,
under a straight-life annuity,
payments end; under a period-certain-and-continuous annuity,
payments continue to the alternate payee’s designated
beneficiary for the remainder, if any, of the period
23
In general, if a participant
dies before starting benefit
payments, PBGC pays
the
participant’s surviving
spouse
a
qualified
preretirement
survivor
annuity
(QPSA).
The
surviving
spouse
can
If
the
alternate
payee
is
to
receive
a
surviving
spouse
benefit
only
under
a
qualified
preretirement survivor annuity
and/or qualified joint-and-survivor annuity (that is, the alternate
payee will
not
receive
a
separate
interest
or
shared
payment
benefit),
see
the
PBGC
Model
Treat-As-Spouse
QDRO—Appendix E.
(Survivor rights may be assigned in a shared
payment QDRO only if the participant’s benefit payments have
not started
when the order is submitted to
PBGC for qualification or if when the participant
began
receiving
benefits
the
benefit
was
being
paid
as
a
joint
and
survivor
benefit
with the alternate payee as
survivor. A separate interest QDRO may be used only if the
participant’s benefit payments have not started when the order
is submitted to PBGC for qualification.) Note: PBGC will not qualify
an order seeking to change the beneficiary of a survivor annuity
that is in pay prior to PBGC’s receipt of the order.
Indicate
whether
the
alternate
payee
will
be
treated
as
the
spouse
of
the
participant
for
purposes of part or all of the
qualified preretirement survivor annuity and/or the qualified
joint-and- survivor
annuity,
and,
if
so,
indicate
the
part
(all
or
some
portion)
of
the
participant’s
benefit
on which the survivor annuity is
to be based.
This
section
applies
only
if
the
alternate
payee
is
the
spouse
or
former
spouse
of
the
participant.
PENSION
BENEFIT
GUARANTY
CORPORATION
certain.
PBGC
will
not
qualify
or
enforce
a
separate
interest
Order
that
provides
for
the
alternate payee’s
benefit to revert
to the participant if
the alternate payee dies
after commencing benefits.
The
PBGC
Model
Shared
Payment
QDRO
addresses
what
happens
to
the
alternate
payee’s
benefit if the alternate payee
dies before the participant dies (whether or not benefit payments
have started to the alternate payee). If the alternate payee dies
before the participant, unless the QDRO states otherwise, the
participant’s monthly benefit payments will be returned to the
amount that the participant would have received assuming there was
no QDRO. The alternate payee cannot pass payments on to another
beneficiary upon death unless the beneficiary is designated
in
the
Order
as
a
Contingent
Alternate
Payee.
However,
as
with
the
Separate
Interest QDRO,
the
Shared
Payment
QDRO
could
be
drafted
to
cover
multiple
alternate payees and/or
one or multiple contingent
alternate payees,
such
as
payments
to
the
participant’s
former
spouse
and
then,
upon
the
former
spouse’s death, to the
participant’s dependent children as contingent alternate
payees. See Language for Including a Contingent Alternate
Payee—Appendix F.
Example
9.
Continuing
with the Shared Payment QDRO in Example 2, Dick retires and begins
receiving his pension benefits
as a joint-and-survivor annuity. Jane receives a 25% share of Dick’s
benefit payments. Two years
after
commencing
benefit
payments,
Jane
dies.
Because
their
QDRO
did
not
name
a
contingent alternate
payee,
Jane’s
portion
of
Dick’s
benefit
payments
reverts
to
Dick
at
Jane’s
death.
SECTION
10.
SURVIVING
SPOUSE
RIGHTS
OF
ALTERNATE
PAYEE
24
However, some alternate payees and
participants may choose to include survivor annuity provisions in
their orders. Since such assignments are permissible, PBGC will
qualify a separate interest
order
that
includes
an
assignment
of
survivor
rights
to
an
alternate
payee.
For
the
PBGC Model Separate Interest
QDRO, where the participant retains
a separate interest in only part of their benefit, the survivor
benefit will be based on only that portion of the benefit retained
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
elect
to
take
the
QPSA
in
the
form
of
a
straight-life
annuity
or
a
certain-and-continuous
annuity. If a participant dies
after starting benefit payments in the form of a qualified
joint-and-survivor annuity
(QJSA),
PBGC
pays
the
participant’s
surviving
spouse
the
survivor
portion
of
the
QJSA.
PBGC generally will qualify an Order assigning
the alternate payee a survivor benefit based on the
participant’s
benefit
as
of
specific
date
or
to
the
extent
of
participant’s
benefit
assigned
to
the alternate payee under
Section 3. Under the shared payment model QDRO, the participant’s
former spouse, as the alternate payee, can be treated as the
surviving spouse (even if the participant has remarried) based on
the participant’s benefit or to the extent that the
participant’s benefit has been assigned to the alternate payee
under Section 3.
NOTE:
Where an order assigns to the alternate payee any part of the
survivor portion of the QJSA, the participant cannot elect a
form
of benefit other
than
the plan’s QJSA with the alternate payee as beneficiary unless
the
alternate payee consents to
a
different benefit form at the time the pension is to begin.
The
portion
stated
in
Section
10
of
the
model
is
not
the
plan’s
automatic
survivor
percentage
of a joint-and-survivor annuity
benefit (e.g., a joint-and-50% survivor annuity benefit). It is the
portion of the participant’s benefit on which the survivor
benefit will be based.
For the PBGC
Model Shared
Payment QDRO,
the survivor benefit may be based on all or a portion
of
the
participant’s
accrued
benefit.
If
35%
is
entered
in
section
10
of
the
shared
payment
QDRO,
the
alternate
payee
will
get
a
survivor
benefit
based
on
35%
of
the
participant’s benefit. The
survivor benefit will then be 50% (unless the plan’s QJSA
provides for a greater percent) of the participant’s benefit,
times 35%.
Typically, separate interest orders do not
need to award post-retirement survivor rights to an alternate payee.
This is because the alternate payee’s benefit is actuarially
based on the alternate payee’s
lifetime
so
the
alternate
payee
will
receive
lifetime
benefits
regardless
of
whether
survivor benefits
are
awarded.
Nor
does
it
matter
if
the
participant
dies
before
the
alternate
payee
begins to receive benefits
because of the way PBGC administers separate interest orders.
When PBGC administers a separate interest
order, it uses a totally severed approach. The participant’s
benefit
is divided into two separate
parts
– one for
the participant and one for
the alternate payee. Once the
order is qualified, the participant’s death before or after
the alternate payee’s
benefits
commence
will
not
affect
the
alternate
payee’s
rights
to
a
lifetime
benefits.
Thus, assignment
of
either
pre-
or
post-
survivor
annuities
are
not
needed
to
ensure
that
the
alternate payee will receive
lifetime benefits.
25
NOTE:
If a participant is married as of their annuity starting date, and
the participant did not waive the QJSA (with spousal consent), that
spouse retains the right to the survivor annuity even if the
participant
and
spouse
later
divorce.
The
spouse
retains
this
right
to
the
survivor
annuity
even
if no domestic relations order is submitted to PBGC. Moreover, PBGC
will not qualify an order which would require a surviving spouse
benefit to be relinquished after the joint-and-survivor annuity is in
pay status. PBGC will generally not enforce such an order, even if
qualified by the prior plan administrator,
unless
the
survivor
benefits
had
been
relinquished
before
PBGC
trusteed
the
plan.
PENSION
BENEFIT
GUARANTY
CORPORATION
as a separate interest by the participant.
Thus, if 35% is entered in section 10 of a separate interest
QDRO,
and
the
separate
interest
retained
by
the
participant
is 40%,
the
alternate
payee will get a survivor
benefit based on 35% of the participant’s separate interest,
or 35% of the 40%
separate
interest
retained
by
the
participant.
Assuming
the
survivor
benefit
under
the
plan is 50% of the participant’s
accrued benefit, the survivor benefit payable to the alternate payee
will be 35% (the amount specified in section 10) times 40% (the
participant’s retained separate interest benefit) times 50%
(the plan’s survivor percentage for the QJSA) of the
participant’s monthly plan benefit.
Survivor benefits are in addition to a
separate interest
or shared payment the
alternate payee also has
a
right
to
receive.
Generally,
PBGC
will
pay
survivor
benefits
in
accordance
with
the
terms
of the
QDRO
even
if
the
participant
has
designated
a
different
beneficiary
or
has
remarried,
as
long as the order was submitted
before the participant’s
annuity starting date. An order
assigning pre- retirement
survivor benefits that is submitted before the participant’s
retirement date, but after his or her death, will only be qualified
under limited circumstances. You may wish to contact PBGC for more
information before attempting to obtain an order.
Example
10.
Continuing
with the Separate Interest QDRO in Example 1, Carol dies at age 41.
Mark’s separate interest
in
Carol’s
pension
benefit
is
unaffected
by
her
death,
but
PBGC
will
not
pay
benefits
to
him
before
Carol would have reached her “earliest PBGC retirement date.”
Also, if the QDRO is silent as to survivor benefits,
because
Carol
and
Mark
were
not
married
at
the
time
of
Carol’s
death,
Mark
is
not
treated as Carol’s
spouse
and
will
not
receive
a
QPSA.
Example
11.
Continuing
with
the
Shared
Payment
QDRO
in
Example
2,
assume
the
QDRO
provides
that
Jane
will
be
treated
as
Dick’s
surviving
spouse for purposes
of
survivor
benefits
payable
under
the
plan as
of
the
date of
marital separation based on 35% of his benefit. Dick can elect any
form of annuity for the remaining 65%
of
his
benefit.
Assume also
that
Dick’s
monthly benefit payable as of
the
date
of
separation
was $900
per
month.
When
Dick
retires,
he
elects
a
qualified
joint-and-50%-survivor
annuity
for
his benefit as of the date of separation, which reduces the monthly
benefit payable as of the date of separation from
$900
to
$820.
Based
on
the
terms
of
their
Shared
Payment
QDRO,
Jane
is
to
receive
25%
of
the
monthly
benefit payable during Dick’s life, or $205. Three years after
starting benefit payments, Dick dies. Under
the
terms
of
their
QDRO,
Jane’s
25%
portion of Dick’s
benefit
payments
stops
at Dick’s death. However,
Jane
will
receive
a
survivor
annuity
(that
is,
a
monthly
benefit
for
her
lifetime)
based
on
35%
of
26
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
Dick’s
benefit
payable
under
the
plan
as
of
the
date
of
separation,
or
$287
(35%
of
$820).
Jane’s
joint- and-50%
survivor
annuity
benefit
based
on
the
$287
will
be
$143.50
(50%
of
$287).
In rare cases, a pension plan provides for
survivor benefits in addition to those required by ERISA. For
example, certain plans, typically plans covering employees in the
steel industry, provide “Free Surviving Spouse Benefits”
– survivor benefits that
impose no cost
on a participant’s
benefit,
i.e., the
participant’s benefit is
not reduced to provide a survivor annuity. In order for part or all
of such benefits to be paid to
an alternate payee (rather than to the person who otherwise would be
entitled to receive such death benefits under the plan, for example,
a
second
spouse),
the
QDRO
must
specifically
provide
for
payment
of
such
benefits to the alternate payee.
SECTION
11.
OTHER
REQUIREMENTS
The
provisions
in
this
section
should
be
in
all
Orders
submitted
to
PBGC,
and
the
parties’ attorneys or
representatives should ensure that the provisions are met.
SECTION
12.
RESERVATION
OF
JURISDICTION
Include
the
necessary
language
for
the
court
issuing
the
domestic
relations
order
to
retain jurisdiction over the
Order.
27
Plan ahead and allow enough time at each stage
of the process. Failure to do so may preclude certain
benefit
options
for
the
alternate
payee.
For
example,
if
PBGC
does
not
receive
an
original signed domestic
relations order (or a copy certified or otherwise authenticated
under state domestic relations procedures) until after the
participant is in pay status, the alternate payee will not be able
to have a separate interest order or an order providing for a
survivor benefit for the alternate payee approved as a QDRO by PBGC.
In addition, if PBGC does not receive a draft or signed domestic
relations order until after the participant’s death, there may
be no plan benefits available to pay to an alternate payee pursuant
to a QDRO.
To submit an original signed order or a
certified or authenticated copy to PBGC, send it to the PBGC QDRO
Coordinator, P.O. Box 151750, Alexandria, VA 22315-1750. Because
PBGC needs
an
original
signed
order
or
a
certified
or
authenticated
copy,
the
order
cannot
be
submitted electronically to
PBGC.
SUBMISSION
TO
PBGC
PBGC
REVIEW
OF
ORDERS
AND
THE
SUSPENSION
OF
BENEFITS
DURING
ITS REVIEW
PENSION
BENEFIT
GUARANTY
CORPORATION
III.
Procedures
and
Checklist
PLANNING
FOR
A
QDRO
PBGC
will
review
an
original
signed
order
or
a
certified
or
authenticated
copy
to
determine whether the order is
qualified and will inform the interested parties in writing of its
determination. Interested parties include all parties named in the
order, their attorneys (if identified in a release signed by the
submitting party), and any representative designated in writing by
the parties.
If PBGC determines the order is not a QDRO,
PBGC will explain the reason(s) along with its procedures
for
appealing
the
determination.
An
appeal,
or
a
request
for
an
extension
of
time
to appeal, must be filed within
45 days after the date of PBGC’s determination. While PBGC is
reviewing
the
order
to
determine
whether
the
order
is
qualified,
PBGC
will
suspend
payment
to the participant of any
amounts that the domestic relations order would give to the alternate
payee.
If PBGC determines that the order is
qualified, PBGC will begin making payments (including any suspended
payments) to the alternate payee under the QDRO after the 45-day
period for filing an appeal has elapsed and the alternate payee has
submitted a benefit application. If an appeal
is
filed,
or
a
suit
is
filed
in
court,
PBGC
will
continue
to
suspend
payment
of
the
benefits in controversy until
the appeal or suit is resolved.
If
PBGC
determines
that
the
order
is
not
qualified,
PBGC
will
lift
the
suspension
and
make any back payments to the
participant as soon as the 45-day period for filing an appeal has
elapsed. However, the suspension of payments will continue if,
within 45 days of PBGC’s
28
If an original signed
order
or a certified or authenticated
copy is received by PBGC within the 120-day period, PBGC will review
the order and suspend benefits in accordance with the procedures
described in “PBGC Review of Orders and the Suspension of
Benefits During Its Review,” which appears earlier in this
section. If an original signed order or a certified
or
authenticated copy is not
received by PBGC within the 120-day period, PBGC will put the
participant
in
pay
status
if
he
or
she
applied
for
benefits
before
the
draft
order was
received
or while
it
was
being
reviewed
unless
by
the
end
of
the
120-day
period
PBGC receives a copy of a court
scheduling order, or a written statement by the participant or
alternate payee (or the participant’s or alternate payee’s
attorney or representative), to the effect that the court will not
review the proposed domestic relations order until after the 120-day
period
has
ended.
If the participant or alternate payee provides
a copy of a court scheduling order, or a written statement
by
the
participant
or
alternate
payee
(or
the
participant’s
or
alternate
payee’s
attorney or representative), to
the effect that the court will not review the proposed domestic
relations order until after the 120-day period has ended, PBGC will
grant an extension of the 120-day period based on the facts and
circumstances.
PBGC
will
not
suspend
a
participant’s
payments
for
more
than
18
months
from
the
date
the
first payment to the alternate
payee would have been
due under the order. If PBGC is
unable to resolve the issue of whether the DRO isa QDRO within the
18-month period described above, PBGC
will
pay suspended benefits to the
participant with interest at the applicable federal mid-term rate.
DRAFT
DOMESTIC
RELATIONS
ORDERS
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
determination: (1) an appeal is filed or (2)
either party notifies PBGC in writing that they are making the
necessary changes in the domestic relations order and an original
signed order or a certified or authenticated copy of one is
submitted within 120 days of notifying PBGC.
If
an
appeal is filed and
PBGC
determines
on
appeal
that
the
order
is
not
qualified, PBGC will grant both
parties 120 days to submit a revised original signed order or a
certified or authenticated copy.
At
the
request
of
a
participant
or
an
alternate
payee
(or
an
attorney
or
a
representative
of
either), PBGC will informally
review a domestic relations order in draft form to determine if it
would satisfy qualification requirements if submitted as an original
signed order or a certified or authenticated copy. For instructions
on how to submit a draft order for a preliminary, informal review
electronically,
contact PBGC’s Customer
Contact Center at 1-800-400-7242.
To submit a draft
order
for
a
preliminary,
informal
review
by
mail,
send
it
to
the
PBGC
QDRO
Coordinator, P.O.
Box
151750,
Alexandria,
VA
22315-1750.
PBGC will acknowledge receipt of a draft
domestic relations order in writing. For a participant who
is
not
yet
in
pay
status
but
is
eligible
to
receive
benefits
and
has
applied
for
benefits,
PBGC will delay the commencement
of any benefits for a period of up to 120 days from the date that
PBGC notifies the parties of the results of its informal review. For
a participant who is in pay status,
PBGC
will
not
suspend
any
portion
of
the
participant’s
benefit
based
on
receipt
of
a
draft domestic relations order.
An
alternate
payee’s
annuity
starting
date
cannot
be
before
the
date
on
which
PBGC
receives
an original signed order or a
certified or authenticated copy. PBGC will not establish an
alternate payee’s annuity starting date based on the date on
which PBGC receives a draft order.
29
WRITTEN
NOTICE
OF
PENDING
ORDER Anytime
an
interested
party
(including
but
not
limited
to
the
participant
or
alternate
payee)
notifies PBGC of a pending domestic relations order in writing (for
example, in a
letter
or email, or on a pending benefit application), PBGC will delay the
commencement of any benefits
for
a
period
of
up
to
120
days
from
the
date
PBGC
was
notified.
For
a
participant
who is in pay status, PBGC
will
not suspend any
portion
of the participant’s benefit based solely on such notice.
Participants can notify
PBGC of a pending order by fax or by logging into our secure online
service (for both, see www.pbgc.gov),
or by mail at the following address: PBGC QDRO
Coordinator, P.O. Box 151750, Alexandria, VA 22315-1750.
Upon receipt of any pleading intended to add
PBGC as a party to a domestic relations action (including a request
for joinder), PBGC will acknowledge receipt of the documents and
will temporarily delay commencement of benefits for up to 120 days,
in the same manner that PBGC
does when
reviewing
a
draft
domestic
relations
order
(see
above).
PBGC
will
not
appear in any of these actions
and will pay benefits only according to the terms of any domestic
relations order it determines is a QDRO.
After PBGC has qualified an order, a second
order sometimes will be submitted attempting to modify the first
order. When this occurs, PBGC will suspend benefit payments that
would be affected by the new order. If PBGC qualifies the second
order, changes in benefit payments will be made prospectively only
from the date of submission of the second order; the terms of the
second order that differ from the first order will not be applied
retroactively to the date the first order was submitted. If PBGC
does not qualify the second order, see “PBGC Review of Orders
and
the
Suspension
of
Benefits
During
Its
Review,”
above,
for
appeal
rights
and/or
resubmitting
a revised order to PBGC.
PBGC should be notified promptly of any change
in address. The parties also should notify PBGC immediately if an
event occurs that affects benefits PBGC is paying or will pay. For
example, if payments to the alternate payee would end on a future
event,
such as remarriage or a child’s
reaching a certain age, or an event that would affect benefits under
the
QDRO,
the
parties should
immediately
notify
PBGC
in
writing
when
the
event
occurs.
CHANGE
OF
ADDRESS
OR
ENTITLEMENT
STATUS
PENSION
BENEFIT
GUARANTY
CORPORATION
In
that
case,
PBGC
will
grant
an
extension
of
the
120-day
period based on the facts and
circumstances. If PBGC puts the participant in pay status, the
alternate payee
will
not be
able
to have
a
separate
interest order or an order
providing for a survivor benefit for the alternate payee approved as
a QDRO by PBGC.
MULTIPLE
ORDERS
OTHER
PLEADINGS
RELATED
TO
DOMESTIC
RELATIONS
ACTIONS
NOTE:
if the participant is receiving benefits at the time that PBGC
receives a request described in this section, PBGC will not suspend
any portion of the participant’s benefits until a domestic
relations order is received by PBGC.
30
PBGC will not fail to qualify an order submitted after the death of
the participant solely for the reason that the order was issued by a
court or appropriate entity on or after the participant’s
death. However, such an order will not be qualified unless it
satisfies all of the requirements that otherwise must be met for an
order to be a QDRO.
A participant’s death may limit the benefits that can be
assigned to an alternate payee under an order, without causing the
order to fail to meet the legal requirements for qualification. For
example, if a participant who was receiving a straight life annuity
dies, PBGC will not qualify an order submitted after the
participant’s death because no participant benefits remain to
assign to an alternate payee (unless the plan includes a Free
Surviving Spouse Benefit; see explanation above in PBGC Model QDRO
Instructions, Section 10).
ORDERS
SUBMITTED AFTER DEATH
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
31
✔
Does
the
order
include
the
names
of
the
persons
to
whom
it
applies? Does
the order
clearly identify the
participant by
providing
full name, last
known
mailing address, and Social
Security Number? Does
the order clearly identify each alternate payee (and, if
applicable, each contingent alternate
payee)
by
providing
full
name,
last
known
mailing
address,
and
Social
Security Number? Does
the
order
clearly
identify
each
alternate
payee
(and,
if
applicable,
contingent
alternate payee) as a spouse,
former spouse, child, or other dependent of the participant? Does
the order provide the name and address of the guardian, legal
representative, or state
agency
to
whom
PBGC
will
send
payments
on
behalf
of
an
alternate
payee
(and,
if applicable, a contingent
alternate payee) who is a minor or legally incompetent?
✔ Does
the
order
specify
the
amount
to
be
paid
to
each
alternate
payee
and
the
length of time such payments will be made?
Does
the
order
clearly
specify
the
amount
or
percentage
(or
state
how
to
determine
the amount
or
percentage)
of
the
participant’s
monthly
benefit
payment
to
be
paid
to
each alternate payee?
Does
the
order
clearly
specify
(or
allow
a
future
election
that
would
specify)
when payments will start for
each alternate payee?
Does
the
order
clearly
require
payment
to
the
alternate
payee
from
PBGC
(rather
than,
for example, to the participant
for payment to the alternate payee)?
✔
Does
the
order
specify
what
happens
when
the
participant
dies?
PENSION
BENEFIT
GUARANTY
CORPORATION
32
Does the order
clearly identify the defined benefit pension plan (for example, the
formal plan name)?
If
the
participant
has
earned
benefits
in
more
than
one
plan,
are
all
the
plans
clearly identified Is the plan trusteed
by PBGC?
✔ Does
the
order
clearly
specify
the
PBGC-trusteed
pension
plan
to
which
it
applies?
Does
the
order
specify
that
shared
payments
to
the
alternate
payee
stop
no
later
than
the participant’s death
(or never start if the participant dies before entering pay
status)? Does
the
order
specify
that
payments
continue
to
be
made
to
the
alternate
payee
regardless
of
the
participant’s
death
in
the
case
of
a
separate
interest
QDRO? Does
the
order
specify
whether
the
participant’s
former
spouse,
as
the
alternate
payee,
is
to be treated as the
participant’s spouse (regardless of whether the participant
remarries) for all
or
part
of
the
participant’s
remaining
separate
interest
(in
the
case
of
a
separate
interest QDRO)
or
all
or
part
of
the
participant’s
monthly
benefit
(in
the
case
of
a
shared
payment QDRO) for
purposes of the qualified
preretirement survivor
annuity and/or
the qualified
joint-and-survivor annuity?
CHECKLIST
PBGC
suggests
using
the
following
checklist
when
drafting
a
domestic
relations
order
that
will be sent to PBGC:
Is
it
clear
that
the
order
does
not
require
PBGC
to
pay
benefits
that
have
a
value
in
excess of
the
value
of
benefits
to
which
the
participant
would
otherwise
be
entitled
from
PBGC? Is
it clear that the order does not require PBGC to pay any type or
form of benefit, or provide
any
option,
that
either
PBGC
or
the
plan
would
not
otherwise
pay
or
provide
to participants and alternate
payees? Is
it
clear
that
the
order
does
not
require
PBGC
to
pay
benefits
to
an
alternate
payee
that are required to be paid to
another alternate payee under a previous QDRO? Is
it
clear
that
the
order
does
not
require
PBGC
to
pay
benefits
to
an
alternate
payee
in
an amount or form that is not
permitted under ERISA or the Code? Is
it
clear
that
the
order
does
not
require
PBGC
to
pay
benefits
to
the
alternate
payee
for any period before PBGC
receives the order? Is
it
clear
that
the
order
does
not
require
PBGC
to
pay
benefits
as
a
separate
interest
to
the alternate payee if the
participant already is receiving benefit payments? Is
it
clear
that
the
order
does
not
require
PBGC
to
change
the
benefit
form
if
the participant already is
receiving benefit payments?
✔
Does
the
order
comply
with
other
requirements? Early
retirement
subsidy Assignment
of
any
survivor
benefits
(including
the
QJSA
and/or
QPSA) Free
Surviving
Spouse
Benefits
(see
explanation
in
PBGC
Model
QDRO
Instructions, Section 10,
above)
✔ Does
the
order
state
assignments?
Assignments
must
be
specifically
stated
in
the order to be enforceable by PBGC. For example, assignments of – Is
the
order
a
judgment,
decree,
or
order
(including
the
approval
of
a
property
settlement agreement) issued
pursuant to a State’s domestic relations law (including a
community property law)? Was
the
order
an
order
issued
by
a
state
unit,
typically
a
court
or
agency,
with
authority
to issue such judgments,
decrees, or orders under a State’s domestic relations law? Does
the
order
relate
to
the
provision
of
child
support,
alimony
payments,
or
marital property
rights
to
a
spouse,
former
spouse,
child,
or
other
dependent
of
a
participant?
✔
Was
the
order
issued
under
a
State’s
domestic
relations
law?
✔
Does
the
order
specify
what
happens
when
the
alternate
payee
dies?
Does
the
order
clearly
specify
what
happens
to
the
alternate
payee’s
separate
interest,
if
any, when the alternate payee
dies before commencing benefits
Does
the
order
clearly
specify
what
happens
to
the
participant’s
benefit
when
the
alternate payee predeceases the
participant in the case of a shared payment QDRO?
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
33
PENSION
BENEFIT
GUARANTY
CORPORATION
Appendix
A—Defined Benefit Pension Plans and PBGC Benefit Rules
DEFINED
BENEFIT
PENSION
PLANS
There
are
two
basic
types
of
pension
plans:
defined
benefit
plans
and
defined
contribution
plans. PBGC
insures
benefits
of
workers,
retirees
and
beneficiaries
participating
in
most
private-sector defined benefit
plans. PBGC does not insure benefits in defined contribution plans,
such as 401(k) plans.
A defined benefit plan promises
each participant a specified benefit at retirement. The benefit
usually
is
based
on
a
formula
such
as
the
number
of
years
a
participant
has
worked
for
a
company and/or
the
participant’s
average
salary
for
the
last
few
years
of
work
or
over
the
participant’s
career.
Defined
benefit
plans
may
pay
retirement
benefits
in
a
variety
of
ways.
The
most
common
form of
benefit
payment
is
an
annuity.
Normally,
annuity
payments
are
paid
over
the
participant’s
life, over
the lives of the
participant and a beneficiary,
or
over
the longer
of the
participant’s life or
a specified period.
A participant will automatically receive their
benefit in the form of an annuity unless the participant
chooses
(with
spousal
consent,
if
married)
a
different
form
of
payment.
An
unmarried participant usually
will receive an annuity for their life. A married participant
usually will receive a qualified joint-and-survivor annuity (QJSA),
unless the participant has waived it with spousal consent.
If
a married
participant dies
after starting
to receive
retirement
benefits,
the participant’s
spouse at retirement ordinarily
will receive the survivor portion of the QJSA, unless the
participant
had
waived
the
QJSA
with
spousal
consent.
If
the
QJSA
is
not
waived
with
spousal
consent,
the person
who
was
the
participant’s
spouse
at
retirement
ordinarily
will
receive
the
survivor
portion of
the
QJSA
when
the
participant
dies
even
if
the
parties
are
divorced
at
the
participant’s
death.
If
a
married
participant
dies
before
starting
to
receive
retirement
benefits,
the
participant’s
spouse will
receive
a
qualified
preretirement
survivor
annuity
(QPSA),
unless
the
participant
had
waived the QPSA with spousal
consent.
Many defined benefit plans offer participants
a choice of times at which they may retire - early, normal,
or
late
retirement.
The
date
a
participant
chooses
to
retire
and
start
payments
usually
will affect the monthly amount
of pension benefits the
participant receives. In
most plans, the longer a
participant waits to start receiving benefits, the larger the
monthly benefit payments will be.
34
PBGC guarantees most, but not all, pension
benefits in plans that it insures. PBGC does not guarantee
non-pension benefits, such as most death benefits (but PBGC does pay
the plan’s QPSA benefit even if QPSA coverage previously was
waived before plan termination). PBGC does not guarantee benefits
over a certain amount. For example, for single-employer pension
plans terminating in 2024, the maximum amount that PBGC guarantees
is $7,107.95 per
month ($85,295.40 per year) for
a participant who starts receiving benefits at age 65 with a
straight-life annuity. The maximum amount is reduced if benefits
will be paid in a form other than a straight-life annuity. This
maximum amount also is reduced for a retiree who is younger than
age
65
when
the
plan
terminates
and
for
participants
and
beneficiaries
who
begin
receiving benefit
payments
after
the
plan
terminates
but
before
reaching
age
65.
(However,
the
maximum guaranteed amount
generally is not reduced on account of the age of a participant
where the participant retired early (or could have retired early)
under the plan due to a disability that is determined by the Social
Security Administration to meet its definition of disability.) In
addition to the maximum insurance limitation, PBGC’s guarantee
may also be limited for supplemental benefits and benefit increases
resulting from plan amendments within five years before the plan
terminates. PBGC may pay more than the guaranteed amounts if the
plan has enough assets or as a result of PBGC’s recoveries
from employers.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
PBGC
BENEFIT
RULES
If a QDRO awarded a fixed percentage of the
participant’s plan benefit to the alternate payee, the
benefits payable to both the participant and the alternate payee
would be reduced typically by
the
same
percentage
to
reflect
PBGC’s
guarantee
limitations
(as
well
as
any
additional
benefits funded by plan assets
and/or PBGC recoveries).
For example, if a QDRO awarded
an alternate payee 50% of a participant’s $1,000 monthly plan
benefit and if the plan benefit is reduced
by 10% as a result of PBGC’s legal
limitations (as well
as plan funding and PBGC
recoveries), then the participant and alternate payee will each
receive 10% less of their share of the $1,000 monthly plan benefit.
After the 10% reduction to the benefit (from $1,000 to $900), the
$900 benefit is allocated 50% to the participant and the alternate
payee, or $450 per month.
If
a
QDRO
awarding
a
fixed
percentage
of
the
participant’s
benefit
to
an
alternate
payee
is a
separate
interest
order,
PBGC
will
reduce
the
plan
benefit
by
the
applicable
title
IV
limits and
pay
a
fixed
percentage
of
the
reduced
plan
benefit
(determined
on
an
actuarial
basis)
to the
alternate
payee.
However,
if
the
QDRO
(shared
payment
or
separate
interest)
awards
a fixed dollar amount (e.g.,
$500) of the participant’s benefit to the alternate payee,
then the
participant’s
benefit
payable
by
PBGC
would
be
reduced
by
the
fixed
dollar
amount
(or
actuarial equivalent thereof).
In this case, PBGC would reduce the alternate payee’s benefit
only if the fixed
dollar
amount
awarded
to
the
alternate
payee
exceeds
the
total
benefit
payable
by
PBGC
to the participant.
For
participants
who
have
started
receiving
benefit
payments
or
have
properly
chosen
annuity benefit forms before
their plans are trusteed, PBGC generally will pay benefits in the
forms chosen.
For participants who have
not started to
receive
benefits or have not
chosen benefit
35
PENSION
BENEFIT
GUARANTY
CORPORATION
forms at the time their plans are trusteed,
PBGC will pay benefits in the form that participants elect. The
election choices are the plan’s automatic forms –
generally a straight-life annuity for an
unmarried
participant
and
a
QJSA
for
a
married
participant-and
the
optional
forms
provided under PBGC regulations
(see 29 C.F.R. §4022.8(c)). The optional forms provided
currently by PBGC for an unmarried participant or a married
participant who has obtained spousal consent are a: (1)
straight-life annuity, (2) five-year certain-and-continuous annuity,
(3) ten-year certain- and-continuous annuity, (4) fifteen-year
certain-and-continuous annuity, (5) joint-and-50%, -75%,
or
-100% survivor annuity, and
(6) joint-and-50%-survivor
“pop-up” annuity.
The annuity benefit
form available to an alternate
payee who is not yet in pay status depends on the
type
of
QDRO.
With
a
separate
interest
QDRO,
an
alternate
payee
may
choose
from
among optional annuity benefit
forms (1) through (4), above, offered by PBGC, regardless of what
benefit form the participant chooses. With a shared payment QDRO,
the alternate payee will receive a portion of each payment that is
being paid to the participant in an amount designated by the QDRO;
the alternate payee does not choose the annuity benefit form.
Under
both
types
of
QDROs,
if
benefit
payments
to
the
participant
have
not
started,
the
QDRO may provide that the
alternate payee will be treated as the participant’s spouse
for all or part of the
QPSA
and/or
the
QJSA
with
respect
to
either
the
participant’s
benefit
(in
the
case
of
a
shared payment
QDRO)
or
the
portion
of
the
benefit
to which
the
participant
retains
a
separate
interest (in the case of a
separate interest QDRO). In such
case, the alternate payee
would have the right to consent
to a waiver by the participant of the QJSA.
PBGC
will
provide
specific
information
about
the
choices
of
annuity
benefit
forms
at
the
time a participant or alternate
payee applies for benefits. With regard to a separate interest, PBGC
will pay a lump sum if the value of the benefit (determined
separately for the participant and alternate payee) is $5,000 or
less at plan termination.
36
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
Appendix
B—Domestic Relations Orders Qualified Before PBGC Becomes
Trustee
While
this
booklet
deals
with
domestic
relations
orders
issued
after
PBGC
becomes
trustee
of a plan, PBGC receives and
administers domestic relations orders in two other situations: (1) where
PBGC
becomes
trustee
of
a
plan
that
is
already
paying
benefits
pursuant
to
a
QDRO
and (2)
where
PBGC
becomes
trustee
of
a
plan
where
the
plan
administrator
already
has
approved
a QDRO but payments under the
QDRO have not started yet.
When
PBGC
becomes
trustee
of
a
plan
under
which
the
plan
administrator
already
has
approved orders as QDROs, PBGC
generally reviews the QDROs to see if there is anything in the QDROs
that would call their qualification into question under PBGC’s
rules. If any issues arise, PBGC communicates with the parties to
the QDRO. If the Order was qualified in error by the prior
plan
administrator,
the
parties
may
be
required
to
obtain
a
corrected
order
before
payments to the alternate payee
can continue or begin.
Because PBGC guarantees may not cover a
participant’s full pension benefit, a participant’s
benefit may be reduced after PBGC takes over a plan. This can reduce
benefits payable to one
or both parties under the QDRO.
PBGC will not treat the order as not qualified solely because
benefits
paid
by
PBGC
require
reduction
of
the
participant’s
and/or
the
alternate
payee’s
benefit. PBGC will apply the
reduction rules to domestic relations orders qualified before PBGC
becomes trustee (assuming the QDRO is silent) in the same manner as
it applies the reduction rules to orders that are qualified after
PBGC becomes trustee. (See Appendix A above.) If the participant or
alternate payee desires that the guarantee limitation be applied
differently, an amended
order
indicating
how
any
reduction
should
be
addressed
would
need
to
be
submitted
to PBGC for review.
PBGC
guarantee
limitations
apply
to
domestic
relations
orders
qualified
before
or
after
PBGC becomes trustee. In
addition, PBGC benefit form limitations, options and benefit start
date provisions apply to the alternate payee’s benefit
payments or elections under pre-trusteeship domestic relations
orders if the alternate payee’s benefit form election is made
after PBGC trusteeship.
37
PENSION
BENEFIT
GUARANTY
CORPORATION
Appendix
C—QDRO
Tax
Rules
The
following
information
is
not
intended
to
be
tax
advice.
Any
questions
on
tax
matters
should be directed to a tax
advisor or the IRS.
Pension benefits are taxable when they are
paid to the participant or, in some cases, to the alternate
payee.
Internal
Revenue
Service
Publication
575,
Pension
and
Annuity
Income,
explains these
rules.
A
local
IRS
office
will
be
able
to
provide
this
publication,
or
it
may
be
obtained from the
IRS’s
website
at
www.irs.gov
or
by
calling
1-800-TAX
FORM.
Benefit
payments
made
under
a
QDRO directly
to
an
alternate
payee
who
is
a
spouse
or
former spouse
are
taxable
to
that
spouse
or
former
spouse. However, the participant
is taxed on payments made under a QDRO to their children as
alternate payees.
In some cases participants have made their own
contributions to their plan. When pension benefits are paid, a
portion of each benefit payment is a return of some of these
contributions. Because
these
contributions
were
already
taxed
before
they
were
contributed
to
the
plan,
they
will not be taxed again when
they are paid out from the plan. The tax law provides detailed rules
for determining what portion of each payment is a tax-free return of
the participant’s contributions.
There is generally an additional 10 percent
tax on non-annuity payments that are made before age
59
1/2.
However,
this
10
percent
tax
does
not
apply
to
payments
made
to
an
alternate
payee under
a
QDRO.
There
are
special
rules
regarding
rollovers
of
amounts
paid
to
alternate
payees.
Section 401(a)(9) of the Code specifies the
date by which distributions must start. Question and Answer 6 of the
Treasury regulation
§1.401(a)(9)-8 addresses how the required minimum distribution
rules of section 401(a)(9)
of the Code apply to an
alternate payee under a QDRO. Payments to the alternate payee must
begin no later than the date the participant is required
to begin payments under section
401(a)(9) of the Code. The regulation limits the period over which
benefits
may
be
paid
with
respect
to
the
alternate
payee’s
separate
interest,
thereby
limiting what survivor benefits
may be paid, including the length of the period certain in a
certain-and- continuous annuity.
38
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
Appendix
D—PBGC Model Child Support Shared Payment QDRO
(You
may
use
this
model
when
a
defined
benefit
pension
plan
has
terminated,
PBGC
has
become
trustee of the plan, and PBGC is to pay a portion of the
participant’s monthly benefit payments as child support. If
the participant’s benefit payments have not started, you may
submit a shared
payment
or
a
separate
interest
child
support
order
to
PBGC
(e.g.,
a
temporary
life
annuity for the child). After
a participant’s benefits have started, only a shared payment
order may
be
submitted.
Only
a
shared
payment
order
model
is
shown
because,
in
PBGC’s
experience,
it is more commonly used.
NOTE:
Child
support payments under a shared payment order cannot start until the
participant’s benefit
payments
have
started.
Please
read
PBGC
Model
Child
Support
QDRO
Instructions
below
for
important information.
IN
THE COURT
OF
DIVISION COUNTY
IN
RE
MARRIAGE/SUPPORT
OF
: : : : : : : : : :
PETITIONER,
V.
CASE
NO.
PARTICIPANT,
RESPONDENT.
QUALIFIED
DOMESTIC
RELATIONS
ORDER
This Order is intended to be a qualified
domestic relations order (“QDRO”), as that term is
defined
in
section
206(d)
of
the
Employee
Retirement
Income
Security
Act
of
1974,
as
amended (“ERISA”)
and section 414(p) of the Internal Revenue Code of 1986, as amended
(“Code”).
This
Order
is
granted
in
accordance
with
[applicable
state
domestic
relations
law
citations],
which
relate
to
marital
property
rights,
child
support,
and/or
spousal
support
between
spouses
or
between a spouse and a former spouse in matrimonial actions.
39
PENSION
BENEFIT
GUARANTY
CORPORATION
SECTION
1.
IDENTIFICATION
OF
PLAN
This
Order
applies
to
benefits
under
the
[formal
name
of
the plan]
(“Plan”).
The
Pension
Benefit Guaranty Corporation
(“PBGC”) is trustee of the Plan.
SECTION
2.
IDENTIFICATION
OF
PARTICIPANT
AND
ALTERNATE
PAYEE(S)
a.
[Name
of
the
Participant]
is
eligible
to
receive
a
benefit
from
the
Plan
and
is
hereafter
referred
to as the “Participant.” The Participant’s mailing
address is [address].
The Participant’s Social Security Number is [Social
Security Number].
b.
[Name
of
the
Alternate
Payee]
is
hereafter referred
to
as the “Alternate Payee.” The Alternate Payee’s
mailing address is [address].
The Alternate Payee’s Social Security Number is [Social
Security Number].
The Alternate Payee is the child or other dependent of the
Participant.
[If
the
alternate
payee
has
a
guardian,
add:]
The
Alternate
Payee’s
legal
guardian
is
[name
of
guardian],
whose
mailing
address
is
[address].
[If
the
payments
are
required
to
be
sent
to
a
state
agency,
add:]
Payments
under
this
Order
are
to
be
mailed
to
[name
of
agency
and
its
full
mailing
address].
Questions concerning these payments should be addressed to [specify
contact at the state agency] at
[telephone
number].
SECTION
3.
AMOUNT
OF
BENEFIT
TO
BE
PAID
TO
ALTERNATE
PAYEE
a. Starting
at
the
time
specified
in
section
5,
PBGC
shall
pay
to
the
Alternate
Payee
[$x/x%]
of each of the Participant’s
monthly benefit payments.
b.
OPTIONAL: When [insert
future event] occurs
and PBGC is notified in writing, PBGC shall
[increase/decrease]
the
amount
paid
to
the
Alternate
Payee
from
each
of
the
Participant’s
monthly
benefit payments to [$x/x%].
SECTION
4.
PBGC
BENEFIT
ADJUSTMENTS
If
PBGC
adjusts
the
Participant’s
benefit,
any
reduction
shall
be
applied
by
decreasing
[pro
rata
the
Participant’s
and
the
Alternate
Payee’s
benefits/the
Participant’s
benefit
first/the
Alternate
Payee’s
benefit
first],
and
any
increase
shall
be
applied
by
increasing
[pro
rata
the
Participant’s
and
the
Alternate
Payee’s
benefits/the
Participant’s
benefit/the
Alternate
Payee’s
benefit].
40
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
“Pro
rata”
means
a
proportionate
allocation
to
two
or
more
parts
based
on
each
part’s
share
of
the whole.”
SECTION
5.
BENEFITS
START
The
Alternate
Payee’s
commencement
of
benefits
shall
be
[such
future
date
as
the
alternate
payee elects/the
date
when
PBGC
will
start
payments
to
the
Participant/another
future
date.
This
date
must be the first day of a month],
but
not earlier than the later of the date PBGC receives this domestic
relations order and the Participant’s annuity starting date. Payment
shall
not
be
made
until
PBGC
qualifies
this
domestic
relations
order
and
receives
a PBGC benefit application from
the Alternate Payee.
SECTION
6.
FORM
OF
BENEFIT
The
Alternate
Payee
shall
not
have
the
right
to
elect
a
form
of
benefit.
The
amount
paid
to
the Alternate Payee will be
determined by the benefit form elected by the Participant.
SECTION
7.
BENEFITS
STOP
PBGC
shall make payments to the Alternate Payee until the [earlier
of the Participant’s or Alternate
Payee’s death/earlier of: the Participant’s or Alternate
Payee’s death,
[a
specific
date],
or the
date
PBGC is notified of the occurrence of
[insert
specific
event]].
SECTION
8.
DEATH
OF
PARTICIPANT
If
the
Participant
dies
before
the
Alternate
Payee,
the
Alternate
Payee
is
not
entitled
to
any payments as of the first of
the month following the Participant’s death.
SECTION
9.
DEATH
OF
ALTERNATE
PAYEE
If the Alternate Payee dies before the
Participant, PBGC shall return the Participant’s monthly
benefit
payments
to
the
amount
that
the
Participant
would
be
receiving
had
there
been
no
Order.
SECTION
10.
OTHER
REQUIREMENTS
Nothing in
this Order
shall
require PBGC:
a.
To
pay
any
benefits
not
permitted
under
ERISA
or
the
Code;
b.
To
provide
any
type
or
form
of
benefit
or
any
option
not otherwise payable
by
PBGC
with
respect
to
the Plan;
41
The
Court
reserves
jurisdiction
to
amend
this
Order
to
establish
or
maintain
its
status
as
a QDRO under ERISA and the Code.
SECTION
11.
RESERVATION
OF
JURISDICTION
f.
To
change
the
benefit
form
or change the beneficiary of a joint-life annuity if
the
Participant
is
already
receiving
benefit
payments.
PENSION
BENEFIT
GUARANTY
CORPORATION
c.
To
pay
benefits
to
the
Participant
and
Alternate
Payee
with
a
total
value
that
exceeds
the
value of the benefits the
Participant otherwise would receive under title IV of ERISA;
d.
To
pay
benefits
to
the
Alternate
Payee
that
are
required
to
be
paid
to
another
alternate
payee under a QDRO that is in
effect prior to this Order;
e.
To
pay
benefits
to
the
Alternate Payee for
any
period
before
PBGC receives this Order; or
42
Section 10 of the PBGC
Model Shared Payment QDRO, which
addresses treating the alternate payee as the participant’s
spouse for surviving spouse benefits, has been omitted because only
spouses and former spouses qualify for those benefits. See the PBGC
Model QDRO Instructions, in
Part
II
of
this
booklet
for
information
on
all
other
aspects
of
this
model.
If
more
than one child or other dependent is to be
covered by this order, list each child or dependent (and guardian,
if
applicable)
in
section
2.b.,
and
specify
the
amount
of
the
benefit
to
be
paid
to
each child or dependent in
section 3.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
PBGC
Model
Child
Support
QDRO
Instructions
This
model
is
a
simplified
shared
payment
QDRO
that
is
designed
to
provide
child
support
only. As this PBGC model is a
shared payment QDRO, payments to the alternate payee cannot start
until the participant’s benefit payments have started. The
participant’s benefit payments cannot start earlier than the
participant’s “earliest PBGC retirement date”
(defined in PBGC regulation 29 C.F.R. § 4022.10).
43
PENSION
BENEFIT
GUARANTY
CORPORATION
Appendix
E—PBGC
Model
Treat-As-Spouse
QDRO
(You
may
use
this
model
when
a
defined
benefit
pension
plan
has
terminated,
PBGC
has
become
trustee of the plan, and PBGC is to treat a spouse or former spouse
as the participant’s spouse for purposes of a Qualified
Preretirement Survivor Annuity or a Qualified Joint-and-Survivor
Annuity,
or
both.
To
also
provide
an
alternate
payee
with
part
of
the
participant’s
benefit,
use
the
PBGC
Model Separate Interest QDRO or
the PBGC
Model Shared Payment QDRO instead
of this model.
You
may
use
this
model
only
if
it
is
submitted
to
PBGC
for
qualification
before
the
participant’s
benefit
payments
have
started.
Please
read the PBGC
Model Treat-as-Spouse QDRO
Instructions
at the end of
Appendix E for important information.)
IN
THE COURT
OF
DIVISION COUNTY
---------------------------------------------------------------
IN
RE MARRIAGE/SUPPORT OF
: : : : : : : : : :
PETITIONER,
V.
CASE
NO.
PARTICIPANT,
RESPONDENT.
---------------------------------------------------------------
QUALIFIED
DOMESTIC
RELATIONS
ORDER
This Order is intended to be a qualified
domestic relations order (“QDRO”), as that term is
defined
in
section
206(d)
of
the
Employee
Retirement
Income
Security
Act
of
1974,
as
amended (“ERISA”)
and section 414(p) of the Internal Revenue Code of 1986, as amended
(“Code”).
This
Order
is
granted
in
accordance
with
[applicable
state
domestic
relations
law
citations],
which
relate
to
marital
property
rights,
child
support,
and/or
spousal
support
between
spouses
or
between a spouse and a former spouse in matrimonial actions.
44
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
SECTION
1.
IDENTIFICATION
OF
PLAN
This
Order
applies
to
benefits
under
the
[formal
name
of
the plan]
(“Plan”).
The
Pension
Benefit
Guaranty Corporation (“PBGC”)
is trustee of the Plan.
SECTION
2.
IDENTIFICATION
OF
PARTICIPANT
AND
ALTERNATE
PAYEE(S)
a.
[Name
of
the
Participant]
is
eligible
to
receive
a
benefit
from
the
Plan
and
is
hereafter
referred
to as the “Participant.” The Participant’s mailing
address is [address].
The Participant’s Social Security Number is [Social
Security Number].
b.
[Name
of the
Alternate
Payee]
is
hereafter referred to as the “Alternate Payee.” The
Alternate Payee’s
mailing address is [address].
The Alternate Payee’s Social Security Number is [Social
Security
Number].
The
Alternate
Payee
is
the
[spouse/former
spouse]
of
the
Participant.
SECTION
3.
SURVIVING
SPOUSE
RIGHTS
OF
ALTERNATE
PAYEE
[Include
either
a.,
b.,
or
both,
as
appropriate:]
a. PBGC shall treat the Alternate Payee as the
Participant’s spouse for [none/all/X%]
of any qualified
joint-and-survivor
annuity
(QJSA)
that
becomes
payable
under
the
Plan
with
respect
to the Participant.
b.
PBGC shall treat the
Alternate Payee as the
Participant’s spouse for [none/all/X%]
of any qualified
preretirement
survivor
annuity
(QPSA)
that
becomes
payable
to
the
Participant
under the Plan.
[NOTE:
When “X%” is used above, it refers to the portion of the
survivor benefit awarded to the Alternate Payee – not the
automatic survivor percentage of the plan’s QJSA or QPSA
(which is typically 50%). Thus, if the Alternate Payee is awarded
40% of the QPSA benefit and the plan’s automatic
survivor
percentage
for
the
QPSA
is
50%,
then
the
Alternate
Payee
will
receive
20%
of
the
Participant’s benefit as his/her survivor benefit.]
SECTION
4.
AMOUNT
OF
BENEFIT
TO
BE
PAID
TO
ALTERNATE
PAYEE
The
amount
of
benefit
paid
to
the
Alternate
Payee
shall
be
based
on
the
surviving
spouse
benefits provided to the
Alternate Payee under sections 3 and 7.
SECTION
5.
PBGC
BENEFIT
ADJUSTMENTS
If
PBGC
adjusts
the
Participant’s
benefit
from
the
benefit
payable
under
the
Plan,
the
Alternate Payee’s survivor
annuity shall be based on the Participant’s adjusted benefit.
45
PENSION
BENEFIT
GUARANTY
CORPORATION
SECTION
6.
BENEFITS
START
PBGC shall start payments to the Alternate
Payee after the death of the Participant. In the case of
a
qualified
joint-and-survivor
annuity,
the
Alternate
Payee’s
benefit
shall
start
on
the
first
of
the month
following
the
month
in
which
the
Participant
dies.
In
the
case
of
a
qualified
preretirement survivor annuity,
the Alternate Payee’s benefit shall start not earlier than the
first of the month following: the Participant’s death or, if
later, the Participant’s “earliest PBGC retirement
date,” which is defined in 29 C.F.R. §4022.10. The
Alternate Payee may defer commencement of the qualified
preretirement survivor annuity to a date not later than the date
specified by Section 401(a)(9) of the Internal Revenue Code. Payment
shall not be made until the Alternate Payee submits a PBGC benefit
application to PBGC.
SECTION
7.
FORM
OF
BENEFIT
a. If the Alternate Payee is treated as the
Participant’s spouse for purposes of the Participant’s
qualified joint-and-survivor annuity under Section 3.a., above, the
participant must elect the plan’s
automatic
joint-and-survivor
annuity
(unless
the
alternate
payee
consents
to
the
election
of a different form of benefit).
If the Participant dies while receiving payments, PBGC shall pay to
the
Alternate
Payee
the
survivor
benefit
unless the Alternate Payee
consented in writing to the Participant’s waiver of the
qualified joint-and-survivor annuity at the participant’s
retirement.
b. If the Alternate Payee is treated as the
Participant’s spouse for purposes of the Participant’s
qualified
preretirement
survivor
annuity
under
Section
3.b.,
above,
and
the
Participant
dies
prior to receiving benefit
payments, the Alternate Payee may elect a straight-life annuity or a
certain- and-continuous annuity form offered by PBGC.
SECTION
8.
BENEFITS
STOP
PBGC shall make payments to the Alternate
Payee until the death of the Alternate Payee. If the Alternate Payee
elects a certain-and-continuous annuity in the PBGC benefit
application for a qualified
preretirement
survivor
annuity,
and
the
Alternate
Payee
dies
before
the
end
of
the
period certain, any remaining
payments shall be made to the
Alternate Payee’s
designated beneficiary.
SECTION
9.
DEATH
OF
PARTICIPANT
[Include
either
a.,
b.,
or
both,
as
appropriate:]
a. If
the
Participant
dies
before
the
Alternate
Payee
and
before
the
Participant’s
benefit
payments have started, the
Alternate Payee shall be eligible for a qualified preretirement
survivor annuity whose annuity starting date shall be determined in
accordance with section 6.
46
f.
To
change
the
benefit
form or change the beneficiary
of a joint-life annuity
if
the
Participant
is
already
receiving
benefit
payments.
e.
To
pay
benefits
to
the
Alternate Payee for
any
period
before
PBGC receives this Order; or
d.
To
pay
benefits
to
the
Alternate
Payee
that
are
required
to
be
paid
to
another
alternate
payee under a QDRO that is in
effect prior to this Order;
c.
To
pay
benefits
to
the
Participant
and
Alternate
Payee
with
a
total
value
that
exceeds
the
value of the benefits the
Participant otherwise would receive under title IV of ERISA;
b.
To
provide
any
type
or
form
of
benefit
or
any
option
not
otherwise payable by
PBGC
with
respect
to
the Plan;
a.
To
pay
any
benefits
not
permitted
under
ERISA
or
the
Code;
Nothing
in
this Order
shall
require
PBGC:
SECTION
11.
OTHER
REQUIREMENTS
Under
this
Order,
no
benefit
will
be
paid
with
respect
to
an
Alternate
Payee
who
dies
before
the Participant. If the
Participant’s benefit is being paid at the Alternate Payee’s
death,
the Participant’s
benefit will
continue to
be
paid
in
the form
in
which
it
is
being
paid.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
b.
If
the
Participant
dies
before
the
Alternate
Payee,
but
after
the
Participant’s
benefit
payments have started, the
Alternate Payee is eligible to begin receiving survivor benefit
payments in accordance with the form of the Participant’s
benefit and section 3.
SECTION
10.
DEATH
OF
ALTERNATE
PAYEE
SECTION
12.
RESERVATION
OF
JURISDICTION
The
Court
reserves
jurisdiction
to
amend
this
Order
to
establish
or
maintain
its
status
as
a QDRO under ERISA and the Code.
47
PENSION
BENEFIT
GUARANTY
CORPORATION
PBGC
Model
Treat-as-Spouse
QDRO
Instructions
The
instructions for the PBGC
Model Shared Payment and
Separate
Interest QDROs are
generally
applicable
to
the
PBGC
Model
Treat-as-Spouse
QDRO.
Below
are
instructions
for
items unique to this model.
Do
not
use
this
model
if
the
alternate
payee will
receive
part
of
the
participant’s
benefit
as
a
shared
payment
or
separate
interest.
This
model
should
be
used
if
the
sole
purpose
of the
Order is to treat the alternate payee as the participant’s
spouse for a qualified preretirement survivor
annuity
(QPSA),
a
qualified
joint-and-survivor
annuity
(QJSA),
or
both.
To
also
provide an alternate payee with
part of the participant’s benefit, use the PBGC
Model Separate Interest QDRO or the
PBGC Model Shared Payment QDRO
instead of this model.
SECTION
1.
IDENTIFICATION
OF
PLAN–SEE
INSTRUCTIONS
FOR
SECTION
1
OF
MODEL QDRO INSTRUCTIONS.
SECTION
2.
IDENTIFICATION
OF
PARTICIPANT
AND
ALTERNATE
PAYEE(S)–SEE
INSTRUCTIONS
FOR SECTION 2 OF MODEL QDRO INSTRUCTIONS.
SECTION
3.
SURVIVING
SPOUSE
RIGHTS
OF
ALTERNATE
PAYEE–SEE
INSTRUCTIONS
FOR
SECTION 10 OF MODEL QDRO INSTRUCTIONS.
SECTION
4.
AMOUNT
OF
BENEFIT
TO
BE
PAID
TO
ALTERNATE
PAYEE.
Because
the
alternate
payee
will
receive
a
survivor
annuity
upon
the
death
of
the
participant,
this section refers to sections
3 and 7, which describe the survivor annuity.
SECTION
5.
PBGC
BENEFIT
ADJUSTMENTS
Under this model order, the alternate payee
will receive a survivor annuity upon the death
of the participant. The survivor
annuity is based on the amount of the participant’s benefit,
and this section states that
the alternate
payee’s benefit will be
adjusted if PBGC
adjusts the participant’s
benefit.
SECTION
6.
BENEFITS
START
The date on which the alternate payee’s
benefit payments will begin depends on whether the benefit is a QJSA
or a QPSA. A QJSA may start only on the first of the month following
the month of the participant’s death. In the case of a QPSA,
the benefit may start only after the participant’s
death.
However,
the
QPSA
may
not
be
paid
before
the
date
the
participant
would
48
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
have first been entitled to begin receiving a
benefit. The alternate payee may
defer
receipt of the benefit.
In
either
case,
an
application
must
be
submitted
by
the
alternate
payee
before
PBGC
will start making benefit
payments.
SECTION
7.
FORM
OF
BENEFIT
Under the QJSA, the form of benefit is a
survivor annuity paid as a straight-life annuity for the alternate
payee’s life. However, an alternate payee who is entitled to a
survivor annuity under a QPSA may elect from PBGC a straight-life
annuity (which ends on the alternate payee’s death) or a
certain-and-continuous annuity (which continues until the later of
the alternate payee’s death or the end of the period certain)
when applying for the benefit. An alternate
payee who is entitled
to a
QJSA may
consent, in
writing on
a notarized
form, to
an election
by the
participant of a PBGC optional
form (straight-life, certain-and-continuous, or joint-life) when the
participant retires.
SECTION
8.
BENEFITS
STOP
The
time
when
benefits
stop
for
the
alternate
payee
generally
is
governed
by
the
form
elected
in the PBGC benefit application.
SECTION
9.
DEATH
OF
PARTICIPANT
In
a
treat-as-spouse
QDRO,
the
death
of
the
participant
makes
the
alternate
payee
eligible
for
a survivor annuity (either the
QPSA or the QJSA, depending on when the participant dies).
SECTION
10.
DEATH
OF
ALTERNATE
PAYEE
In
a
treat-as-spouse
QDRO,
the
death
of
the
alternate
payee
before
the
participant
effectively ends the alternate
payee’s entitlement to any portion of the participant’s
survivor benefit.
SECTION
11.
OTHER
REQUIREMENTS–SEE
INSTRUCTIONS
FOR
SECTION
11
OF
MODEL QDRO INSTRUCTIONS.
SECTION
12.
RESERVATION
OF
JURISDICTION–SEE
INSTRUCTIONS
FOR
SECTION
12 OF MODEL QDRO INSTRUCTIONS.
49
PENSION
BENEFIT
GUARANTY
CORPORATION
Appendix
F—Language for Including a Contingent Alternate Payee
[If
a
contingent
alternate
payee
is
to
be
named
in
the
PBGC
Model
Separate
Interest QDRO,
use
this
language
for
section
9.]
(NOTE:
If the contingent alternate payee does receive benefit payments, the
monthly benefit amount will be
calculated
based on the age of the contingent alternate payee as of the time
payments begin to the contingent alternate payee.)
SECTION
9.
DEATH
OF
ALTERNATE
PAYEE
a.
Death
Before
Commencing
Benefits
(i) If the Alternate Payee dies before
commencing benefits, the Contingent Alternate Payee named in
subsection c, below, shall be paid an amount actuarially equivalent
to the value of the Alternate
Payee’s
benefit
determined
under
section
3.
In
such
case,
all
references
in
this
Order
to the
Alternate
Payee
shall
apply
to
the
Contingent
Alternate
Payee,
except
as
otherwise
indicated (for example, survivor
benefits may only be paid to the spouse or former spouse). Payments
cannot start before the participant’s “earliest PBGC
retirement date,” which is defined in 29
C.F.R.
§4022.10.
PBGC
shall
pay
the
Contingent Alternate
Payee’s
benefit
in
the
form elected by the Contingent
Alternate Payee on the PBGC benefit application.
(ii) If
the
Alternate
Payee
and
the
Contingent
Alternate
Payee
die
before
commencing
benefits, the separate interest
shall revert to the Participant if the participant is alive.
b.
Death
After
Commencing
Benefits
If the Alternate Payee or, if
applicable, the Contingent
Alternate Payee named in
subsection c,
below,
dies
after
commencing
benefits,
any
remaining
fixed
payments
under
a
certain-and-
continuous
annuity
shall
be
paid
to
the
beneficiary
designated
on
the
PBGC
benefit
application. If
the
Alternate
Payee
(or,
if
applicable,
the
Contingent
Alternate
Payee)
was
receiving
a
straight- life annuity at death,
no further benefits will be payable.
c.
Contingent
Alternate
Payee
The
Contingent Alternate Payee is [Name
of the Contingent Alternate Payee]
and is the [spouse/former
spouse/child/other
dependent]
of
the
Participant.
The
Contingent
Alternate
Payee’s
mailing
address
is
[address].
The
Contingent Alternate Payee’s Social Security Number
is
[Social
Security Number].
[If
a
contingent
alternate
payee
is
to
be
named
in
the
PBGC
Model
Shared
Payment
QDRO,
use
this
language:]
50
d. The Contingent Alternate Payee is [name
of the Contingent Alternate Payee]
and is the [spouse/former
spouse/child/other dependent]
of
the Participant.
The
Contingent
Alternate
Payee’s mailing address is
[address].
The Contingent Alternate Payee’s Social
Security
Number
is
[Social
Security
Number].
b. Notwithstanding any other provision in this
Order, PBGC shall make payments to the Contingent
Alternate
Payee
until
the
[earlier
of
the
Participant’s
or
Contingent
Alternate
Payee’s
death/earlier of: the Participant’s or Contingent Alternate
Payee’s death, a specific date, or the date PBGC is notified
in writing of the occurrence of [insert specific event]].
c. If the Alternate Payee and the Contingent
Alternate Payee die before the Participant, PBGC shall
return
the
Participant’s
monthly
benefit
payments
to
the
amount
that
the
Participant
would be receiving had there
been no Order.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
SECTION
9.
DEATH
OF
ALTERNATE
PAYEE
a. If the Alternate Payee dies before the
Participant, the Contingent Alternate Payee named in subsection
d,
below,
shall
be
paid
[$x/x%]
of
each
of
the
Participant’s
monthly
benefit
payments. PBGC shall start
payments to the Contingent Alternate Payee when PBGC starts payments
to the Participant, or, if payments to the Participant have already
started, after the Alternate Payee dies. Payments shall not be made
until the Contingent Alternate Payee submits a PBGC benefit
application to PBGC.
51
If
you
have
additional
questions
about
this
request,
you
can
contact
PBGC’s
Disclosure
Division by calling
202-229-4040.
Pension
Benefit
Guaranty
Corporation 445
12th Street, S.W. Washington,
DC 20005-4026
Disclosure
Division
The
request
should
be
submitted
directly
to
PBGC’s
Disclosure
Division
at:
PENSION
BENEFIT
GUARANTY
CORPORATION
Appendix
G—How to Obtain Certain Participant Information from PBGC
Participants’
records
in
PBGC’s
possession
are
protected
under
the
Privacy
Act
of
1974
(5
U.S.C. §
552a (2012) and PBGC’s implementing regulations. In accordance
with these rules, to obtain certain information about the
participant’s pension entitlement in order to draft or amend a
domestic relations order, the prospective alternate payee or the
alternate payee’s representative must send a written request
to PBGC’s Disclosure Division. The request must:
•
State
that
the
information
the
alternate
payee
is
requesting
“will
be
used
solely
to
obtain
a qualified domestic relations
order under state domestic relations laws”; Be
signed by
the
alternate
payee; Provide
the
participant’s
name
(and
the
participant’s
social
security
number
if
known); Describe the alternate
payee’s relationship to the participant; and
• • •
•
Ask
for
the
following
information
only: ✔
The
name
of
a
participant’s
pension
plan; ✔
The
actual
or
estimated
amount
of
the
participant’s
benefit
under
title
IV
of
ERISA; ✔
The
form(s)
in
which
the
participant’s
benefit
is
payable;
and
✔ Whether
the
participant
currently
is
receiving
benefit
payments
under
the
plan
or,
if not, the earliest date(s)
such payments could commence to the participant.
52
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
Glossary
53
The
following
terms
may
be
useful
in
understanding
this
booklet.
Many of the terms used in this booklet are defined by statute. In
this Glossary, PBGC has provided simplified
definitions that apply to the information discussed in this booklet.
The glossary is intended to align with statutory definitions, where
applicable. In the event a conflict with a statutory definition
arises, the statutory definition will prevail.
Actuarially
Equivalent.
Different
benefits
or
benefit
forms
having
the
same
value
as
of
a
given date using a specified set
of assumptions.
Alternate
Payee.
A
participant’s
spouse,
former
spouse,
child,
or
other
dependent
who,
under
a QDRO,
has
a
right
to
receive
all,
or
a
portion,
of
the
participant’s
pension
benefits
under
a
plan.
Annuity
Starting Date. The
date as of which a periodic (for example, monthly) annuity is
calculated to commence (for example, the first of the month
following attainment of age 65). Due to factors such as (but not
limited to) routine administrative delay, the Annuity Starting Date
(sometimes referred to as “actual retirement date” or
“benefit commencement date”) is NOT necessarily the same
date on which a pension plan or PBGC sends the first benefit payment
Annuity.
A
form
of
benefit
in
which
payments
are
made
at
regular
intervals
for
a
specified
period of time. The most common
form of annuity pays monthly benefits for life.
Beneficiary.
The
person
named
to
receive
benefits
upon
the
death
of
a
participant
or
alternate payee.
Benefit.
A
payment
provided
for
under
a
pension
plan.
Certain-and-Continuous
Annuity. An
annuity
that pays
benefits
over
the
longer
of
the recipient’s life or a specified period (for example, for
60 months) commencing on the Annuity Starting Date.
Contingent
Alternate Payee. An
alternate payee under a QDRO whose benefit
is
contingent upon the death of an alternate payee.
Defined
Benefit Plan. A type
of pension plan that promises participants specified benefits at
retirement.
Retirement
benefits
usually
are
based
on
the
number
of
years
worked
for
a
company or in an industry and
may also be based on salary during that time.
Defined
Contribution Plan. A
type
of
pension
plan
in
which
an
employee
receives
the
amount in
an individual
account,
which includes
contributions
made by
the employer and, if applicable,
the employee. Retirement benefits are based on the amount in each
participant’s account, adjusted for investment experience and
plan expenses. The most common types of defined contribution plans
include profit-sharing plans, 401(k) plans, employee stock ownership
plans (ESOPs), and money purchase plans.
Domestic
Relations Order. Any
judgment, decree, or order (including approval
of a property settlement
agreement) that (1) provides child support, alimony payments, or
marital property rights to a spouse, former spouse, child, or other
dependent of a participant, and (2) is made pursuant to a state’s
domestic relations law.
Earliest
PBGC Retirement Date (EPRD). The
“earliest PBGC retirement date” has a specific meaning
for PBGC purposes and is defined in PBGC
regulation
29 C.F.R. § 4022.10.
Typically,
a participant’s age as of their EPRD
will be 55 unless (1) under the plan’s terms, the participant
cannot
receive
a
benefit
until
a
later
age,
or
(2)
PBGC
determines
under
a
facts-and- circumstances test
that the participant could retire earlier than 55. PBGC tells each
participant what their EPRD is in a benefit determination.
Early
Retirement
Benefit.
An annuity
benefit payable under the terms of the plan, under which the
participant is entitled to begin receiving payments before the
plan’s normal retirement age
and
which
is
not
payable
on
account
of
the
disability
of
the
participant.
Not
all
plans
offer
an early retirement benefit.
Early
Retirement Subsidy. A
portion
of
the
early
retirement
benefit
that
is
payable
under
the terms of the plan in
addition to, or that is more valuable than, the actuarial equivalent
of the benefit payable at the plan’s normal retirement age.
Not all plans include an early retirement subsidy with an early
retirement benefit.
Guaranteed
Benefits. The amount
of a pension plan’s benefit that is guaranteed
by PBGC as
of
the
plan’s
termination
date.
However,
if
the
plan
terminates
while
the
plan
sponsor
is
in bankruptcy and the bankruptcy
was initiated on or after September 16, 2006, the guarantee amount
is fixed as of the bankruptcy filing date.
Joint-and-Survivor
Annuity. An
annuity
that
pays
benefits
over
the
participant’s
lifetime
and thereafter over the lifetime
of the person named as the survivor.
Life
Expectancy.
The
number
of
years
a
person
is
expected
to
live,
on
average,
after
a
given
age.
Lump
Sum.
A
form
of
benefit
payment
in
which
the
entire
benefit
is
paid
at
one
time.
Normal
Retirement Age. The
age for normal retirement defined under a plan. In most cases, the
normal
retirement
age
will
not
be
greater
than
65
years
of
age
or,
if
later,
the
fifth
anniversary of the date the
participant commenced participation under the plan.
Participant.
An
employee
or
former
employee
who
may
be
entitled
to
a
benefit
under
a
pension plan, or whose
beneficiaries may be entitled to
a benefit. A participant is said
to
participate in or to be covered
by the plan.
PBGC
Model Child Support Shared Payment QDRO. The
PBGC Model Child Support Shared
Payment
QDRO
gives
the
alternate
payee
a
portion
of
the
participant’s
benefit
payments under
the
plan
during
the
participant’s
lifetime.
This
model
is
designed
to
provide
child
support only; it is a simpler
version of the PBGC Model Shared Payment QDRO.
PENSION
BENEFIT
GUARANTY
CORPORATION
54
Qualified
Preretirement Survivor Annuity (QPSA). A
QPSA is an annuity provided to a surviving
spouse
when
a
vested
participant
dies
before
receiving
payment
of
their
benefit. The annuity is
generally payable for the
life of the surviving spouse
(who may be the spouse to
whom the participant was married
at the time the participant died, or a former spouse who is
treated by a QDRO as the
participant’s spouse). In
PBGC-trusteed
plans,
the
surviving
spouse
may
elect
to
receive
the
QPSA
in
the
form
of
a straight-life annuity or
certain-and-continuous annuity.
Single-Life
Annuity. An
annuity
that
pays
benefits
over
a
period
of
time
that
depends,
at
least in part, on the survival
of only one person, for example, a straight life annuity or
certain-and- continuous annuity.
Qualified
Joint-and-Survivor
Annuity
(QJSA).
A
QJSA
is
a
joint-and-survivor
annuity
where (1)
the participant receives a definite amount of money at regular
intervals for life, and (2) after the participant dies, the
surviving spouse (who may be the spouse to whom the participant was
married
at
retirement,
or
a
former
spouse
who
is
treated
by
a
QDRO
as
the
participant’s
spouse) receives a definite
amount of money (not less than 50% or more than 100% of the amount
received by the participant before death) at regular intervals for
life.
PBGC
Model Separate Interest QDRO. The
PBGC Model Separate Interest QDRO divides the
value
of
the
participant’s
benefits
into
two
separate
parts-one
for
the
participant
and
one
for the alternate payee. This
model also allows for the assignment of survivor benefits.
PBGC
Model Shared Payment QDRO. The
PBGC Model Shared Payment QDRO gives the
alternate
payee
a
portion
of
the
participant’s
benefit
payments
under
the
plan
during
the participant’s
lifetime.
In
other
words,
the
participant
and
the
alternate
payee
share
the
payments. This model also allows
for the assignment of survivor benefits.
PBGC
Model Treat-as-Spouse
QDRO.
The PBGC Model
Treat-as-Spouse QDRO treats the
alternate
payee
as
the
participant’s
spouse
for
purposes
of
a
qualified
preretirement
survivor annuity (QPSA), a
qualified joint-and-survivor annuity (QJSA), or both. This model
does not provide any part of the participant’s benefit to the
alternate payee as a shared payment or separate interest.
Plan
Administrator. The
person or persons who
administer the plan. If no
one is
designated as the
administrator
in
the
plan
document,
the
employer
is
considered
to
be
the
plan
administrator.
Qualified
Domestic Relations Order (QDRO). A
QDRO is type of Domestic Relations Order (see definition above)
which (i) gives
an
alternate
payee
the
right
to
receive
all
or
a
portion
of
the
benefits
payable
with respect to
a
participant under the plan and
(ii) the plan and/or PBGC has satisfied certain legal and
administrative requirements.
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
55
Spousal
Consent. A
spouse’s
written
and
notarized
agreement
to
allow
the
participant
to
waive the QPSA or elect a form
of benefit other than a QJSA.
Spouse.
An
individual under a formal relationship denominated as a marriage by
State law.
A
QDRO
can
provide
that
the participant’s former
spouse
be
treated
as
the
participant’s
spouse
for
certain pension
benefits.
Straight-Life
Annuity.
An
annuity
that
pays
benefits
over
the
recipient’s
lifetime.
Once
the recipient dies, no further
annuity payments are payable to anyone.
Subsidized
Early Retirement Benefit. An
early retirement benefit that also includes an early retirement
subsidy.
Survivor
Benefit.
The
survivor
part
of
a
preretirement
survivor
annuity
or
a
joint-and-survivor annuity that
is paid to a beneficiary after the participant dies.
Value.
The actuarially
determined amount needed at a point in time to provide a specific
monthly
benefit
at
some
time
in
the
future.
Value
depends
on
the
amount
of
the
monthly
benefit payment, when the
benefit payments start and stop, the age(s) of the recipient(s),
mortality assumptions, and interest assumptions. Also referred to as
“present value” or “actuarial present
value.”
PENSION
BENEFIT
GUARANTY
CORPORATION
56
QUALIFIED
DOMESTIC
RELATIONS
ORDERS
AND
PBGC
PRIVACY
ACT
NOTICE
PBGC
is giving you this notice (whether you are a participant or an
alternate payee) pursuant to the Privacy Act of 1974, as amended, 5
U.S.C. § 552a (2012), as part of a collection of information
from you related
to
a
qualified
domestic
relations
order.
PBGC
uses
the
information
collected
to
determine
whether
an alternate payee is entitled to a portion (or all) of the
participant’s benefit and to make appropriate payments. PBGC
uses the Social Security Numbers you provide to identify the
participant’s and the alternate payee’s records within
PBGC, to report income for tax purposes, and to respond to lawful
requests
for
information
from
other
individuals
and
entities.
Your
response
is
voluntary
(although
a
court
may
require
you
to
give
PBGC
some
or
all
of
this
information
in
order
to
receive
a
benefit
due
to
you
as
a
participant or alternate payee). However, PBGC generally cannot pay
any portion of
a
living participant’s benefit to someone else, except as
provided in a qualified domestic relations order. Failure to provide
information to PBGC, including a Social Security Number, may delay
or prevent PBGC from paying a benefit to an alternate payee.
PBGC
may release information about you to other individuals and entities
when necessary and appropriate under the Privacy Act, including: to
third parties to make benefit payments to you; to a company that was
responsible for the pension plan or to entities related to that
company; to a labor organization
that
represents
you;
to
obtain
information
from
the
Federal
Aviation
Administration
relevant
to a pilot or former pilot’s eligibility for a disability
benefit; to obtain your address from other sources when PBGC does
not have a current or valid address for you; and, to a limited
extent, to your spouse, former spouse, child, or other dependent
when such individual may be entitled to benefits from PBGC.
PBGC
may also release information about you to appropriate law
enforcement agencies when PBGC becomes
aware
of
a
possible
violation
of
civil
or
criminal
law.
If
PBGC,
an
employee
of
PBGC,
the
United
States, or another agency of the United States, is involved in
litigation, PBGC may provide relevant information about you to a
court or other adjudicative body or to the Department of Justice
when it represents PBGC. PBGC may also provide information about you
to the Office of Management and Budget
in
connection
with
review
of
private
relief
legislation
or
to
a
Congressional
office
in
response
to
an
inquiry that office makes about you at your request.
PBGC
publishes notices in the Federal Register that describe in more
detail when information about you
may
be
made
available
to
others.
A
copy
of
the
most
recent
Federal
Register
notice
may
be
obtained
from
the PBGC
Privacy
web page
(www.pbgc.gov)
or
by
contacting
PBGC’s
Customer
Contact
Center
by calling 1-800-400-7242. If you use a TTY/ASCII, call toll-free
1-800-877-8339 and give the
communications
assistant
PBGC’s
telephone
number.
PBGC’s
authority
to
collect
information
from
you,
including
your
Social
Security
Number,
is
derived
from
29
U.S.C.
§§
1055,
1056(d)(3),
1302,
1321,
1322, 1322a, 1341, and 1350 (2012).
57
Additional
Information
and
Support
For
information about a pension plan that PBGC has trusteed, benefit
information with respect
to
a participant in such a plan, or information about Qualified
Domestic Relations Orders, call PBGC’s Customer Contact
Center, 1-800-400-7242, or write to PBGC QDRO
Coordinator,
P.O. Box
151750,
Alexandria,
VA
22315-1750.
(TTY/TDD
users
should
call
the
Federal
Relay
Service
toll-free at 1-800-877-8339 and ask to be connected to
1-800-400-7242.)
To
submit
a
domestic
relations
order
to
PBGC
(or
a
draft
order
for
a
preliminary,
informal
review),
send it to PBGC QDRO Coordinator, P.O. Box 151750, Alexandria, VA
22315-1750.
445
12th Street S.W. Washington,
DC 20024-2101 pbgc.gov
PBGC
Publication
100 Revised
02/XX
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| Author | Levin Karen |
| File Modified | 0000-00-00 |
| File Created | 2024-11-21 |
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