Compliance May 1, 2009

AT&T Did not Improperly Delay QDRO Payment

May 1, 2009 (PLANSPONSOR.com) - The U.S. District Court for the Eastern District of Missouri has found that AT&T Inc.'s pension plan administrator did not act improperly by not immediately paying lump-sum benefits to an employee's ex-wife under two domestic relations orders.
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According to the court opinion, neither the first domestic relations order (DRO) nor an amended DRO entitled Sigrid V. Green to the immediate payment of pension benefits. The court determined Green was entitled to a calculated portion of her ex-husband’s pension benefits on the earlier of his retirement date, even if he has not yet retired, or when he elects to start receiving benefits.

U.S. District Judge David D. Noce wrote in the opinion that following the provisions of the QDRO, AT&T properly withheld the payments, and did not breach its fiduciary duties under the Employee Retirement Income Security Act (ERISA).

The court also rejected Green’s argument that AT&T was liable for statutory penalties for failing to timely provide her with a copy of a summary plan description. Green did not make a clear and specific request for an SPD as required by ERISA Section 104(b)(4). In June 2006 she sent Fidelity Employer Services Co. an e-mail requesting QDRO “calculations” and a “calculation kit,” the opinion noted

Richard and Sigrid Green were married in July 2001, and were divorced in September 2005. During the marriage, Richard worked for AT&T Services Inc., an affiliate of AT&T, and participated in the company’s pension plan. AT&T was the named administrator of the plan.

Under the terms of the former couple’s DRO, Sigrid was awarded 79.1% of Richard’s pension account, not including its balance prior to the date they were married. The company determined that the DRO was a QDRO, so Sigrid sought immediate payment of her portion of the benefits. Fidelity Employer Services Co., contracted by AT&T to perform plan functions determined that Sigrid was not entitled to immediate payment of the benefits and also disputed the amount of benefits to which Sigrid was entitled.

In June 2007, Green obtained an amended DRO recalculating her share of the pension account, but that order also did not call for immediate lump-sum payment of the benefits.

The case is Green v. AT&T Inc., E.D. Mo., No. 4:07 CV 1537 DDN, 4/29/09.

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