Judge: Divorce Order a Valid – Though Imperfect – QDRO

March 7, 2003 (PLANSPONSOR.com) - A New Jersey woman who has been battling for half of her ex-husband's pension account won an important victory when a federal judge ruled that the couple's divorce settlement represented a valid Qualified Domestic Relations Order (QDRO).

US District Judge Stephen Orlofsky of the US District Court for the District of New Jersey said Barbara Smith’s divorce settlement paperwork still entitled her to part of her ex-husband Mark’s pension money even though the document didn’t meet QDRO requirements in every detail, according to a report in EBIA Weekly. Orlofsky ordered that the administrator of the DuPont Pension and Retirement Plan comply with the dictates of the divorce agreement.

The company argued that Barbara Smith’s divorce order was not valid as a QDRO because it didn’t specify the details of the pension benefits to be paid and that DuPont didn’t receive it until after Mark Smith’s death in September 1998.

“It is asking too much of domestic relations lawyers and judges to expect them to dot every ‘i’ and cross every ‘t’ in formulating divorce decrees that have ERISA implications,” Orlofsky contended.

To fill in the blanks left by the settlement agreement, Orlofsky looked to DuPont’s   “voluminous” pension plan document, which provided for a spousal benefit upon the death of a current or former employee and specified both a formula for calculating the benefit and a payment schedule. He also rejected the argument about DuPont not getting the documents until after Mark Smith’s death, saying, “the statute does not absolutely require the plan administrator’s receipt of the order for its qualification as a QDRO.”

Case History

Mark Smith worked for DuPont from July 1973 until October 1988 when he resigned. Two years later, the Smiths divorced. Mark Smith died eight years after the divorce. DuPont’s plan administrator declined to pay benefits to Barbara Smith because the official concluded that her divorce settlement agreement was not a QDRO.

Barbara Smith sued, and the plan administrator defended by arguing that the settlement agreement did not specify the type of benefit to be paid, the amount or percentage of the benefit to be paid, the manner in which the payment was to be determined, or the time period in which the payments were to be made.

The case is Smith versus Estate of Smith.