Pensions and Retirement Plans at the Death of Participant Spouse

      

 

Can you divide a retirement plan when the participant spouse dies before entry of an Order dividing the plan?

In California, Pension and other retirement plan contributions made during marriage are considered community property. Any contributions made prior to marriage or after separation are the separate property of the contributing spouse.

Determining the community vs. separate property interest in a pension plan can be complicated. Usually, parties in a dissolution matter will ask the court to appoint a pension expert to prepare the Order dividing the plan. First, the pension or retirement plan must be joined as a party to the divorce. Without a joinder, the court cannot issue orders dividing the plan benefits. The expert will then prepare a Qualified Domestic Relations Order (QDRO) explaining the details of the division of the plan. The QDRO must meet the specificity requirements of ERISA(Employee Retirement Income Security Act of 1974) and must be approved by the Judge and the pension benefit provider.

The process of obtaining a QDRO and dividing a retirement plan can take 6-10 months after Entry of a Judgment of Dissolution and appointment of the Pension Expert. So what happens if the member (employee) spouse dies after entry of the Judgment and before the QDRO is entered?

The Court has jurisdiction to enter a QDRO Nunc Pro Tunc (to a date prior to a Party’s death) where the Judgment substantially complies with ERISA’s specificity requirements for a QDRO.
However, the Judgment must meet the specificity requirements under ERISA, including the name of Plan, and the amount or percentage of a participant’s benefit to be awarded to the nonmember spouse. A Judgment that simply reserves on division of the retirement plans does not meet the specificity requirements.

Special rules apply when the member spouse dies after remarriage to a new spouse and before the QDRO is entered. Whether the former spouse is able to enter a QDRO Nunc Pro Tunc can also depend on whether the member spouse dies before receiving pension benefits or the member spouse dies after retirement. There are also certain time limits for entering a postmortem QDRO.
In short, parties should be diligent about completing the QDRO after entry of a Judgment for Dissolution of Marriage as soon as possible. In the event that your former spouse dies before the QDRO has been filed, you should consult with an experienced family law attorney to timely enter the QDRO.

If you want to hear more about the latest information on divorce, including what the law says about retirement plans, please contact our office to schedule a consultation. The Law Office of Bawden and Kochis also handles family law issues regarding adoption, annulment, mediation, domestic violence, child custody, child and spousal support as well as pre-marital and post-marital agreements. Telephone (909)792-0222, or email us at Officestaff@Richardbawdenlaw.com.

When he is not practicing law, Robert enjoys traveling, especially to the Caribbean and to Hawaii. He also claims the Lakers as his favorite sports team, loves Italian food, and often relaxes with a guitar.