Compliance January 5, 2006

QDRO Amended After Participant Death not Valid

January 5, 2006 (PLANSPONSOR.com) - The US District Court for the District of New Jersey has determined that an amended qualified domestic relations order (QDRO) naming a participant's ex-wife as alternate payee of his monthly pension is not valid.
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The court said the document could not give the ex-wife a right to survivor benefits that did not exist at the time of the participant’s death, and therefore was not a qualified domestic relations order (QDRO) under the Employee Retirement Income Security Act (ERISA).

According to the opinion, the couple’s divorce agreement (which met the requirements of a QDRO) provided for the wife to receive $232.56 per month once the husband began receiving his monthly pension benefits.   Since he died before he began receiving his monthly benefits, the wife’s right to the benefits never existed.  

The pension fund administrators denied the wife’s claim for benefits on this basis.   After being denied, the wife obtained the amended QDRO from a New Jersey state court.   The amended QDRO stated that the ex-wife was to be deemed the “alternate payee” of husband’s benefits and was to be treated as his surviving spouse.   After still being denied benefits, the ex-wife sued.

The court granted summary judgment in favor of the pension fund.

The case is Sanzo v. NYSA-ILA Pension Trust Fund, D.N.J., No. 04-300 (WGB), unpublished 12/29/05.

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