Compliance December 8, 2005

QDRO Invalid for Contradicting Divorce Decree

December 8, 2005 (PLANSPONSOR.com) - The US District Court for the Eastern District of Missouri ruled that a court order that divided pension plan benefits between a participant and his ex-wife was not a qualified domestic relations order (QDRO) because it used a distribution formula that contradicted the terms of the couple's divorce decree.
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The court noted that the divorce degree provided for the wife to receive half of the husband’s pension benefits.   The Missouri state court issued a DRO with a formula that would have given the wife more than $300,000 more than the value of his account at the time of the divorce.

The husband’s employer that sponsored the pension plan objected to the DRO.   The court ruled for the employer since it would cause the plan to pay all of the husband’s benefits to the ex-wife.   According to the opinion, the formula contained in the DRO “is unclear and contradicts the state court’s intentions.”

The court also said the order was unclear because it did not specifically state the number of payments to be made to the ex-wife, the distribution method, or the time period for which the order applied.

The case is Alberici Corp. v. Davis, E.D. Mo., No. 4:04-cv-545 CEJ, 12/6/05.

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