2023 Montana Code Annotated › Title 19. Public Retirement Systems › Chapter 20. Teachers' Retirement › Part 3. Membership › 19-20-305. Alternate payees -- family law orders

19-20-305. Alternate payees -- family law orders.
(1) A participant in a retirement system may have the participant's rights modified or recognized by a family law order.
(2) For purposes of this section:
(a) "actuarially equivalent amount" means the portion of the participant's benefit transferred to an alternate payee and actuarially adjusted to provide a benefit payable for the alternate payee's lifetime;
(b) "alternate payee" means the former spouse of the member or retiree who is entitled to an actuarially equivalent amount or a fixed amount of the member's or retiree's retirement benefit;
(c) "family law order" means a certified copy of an order of a court with competent jurisdiction, on a form prescribed and provided by the retirement system, concerning spousal maintenance or marital property rights that includes a transfer of all or a portion of a participant's right to payments from the retirement system to an alternate payee in compliance with this section; and
(d) "participant" means a member or retiree of the retirement system.
(3) A family law order must identify an alternate payee by full name, current address, date of birth, current phone number, and social security number. An alternate payee's rights and interests granted in compliance with this section are not subject to assignment, execution, garnishment, attachment, or other process. An alternate payee's rights or interests may be modified only by a family law order amending the family law order that established the right or interest or by a full renunciation of the alternate payee's rights by the alternate payee.
(4) A family law order may not require:
(a) a type or form of benefit, option, or payment that is not available to the affected participant under the retirement system or that would require administration in a manner different from the administrative processes used by the retirement system for administration of retirement benefits in general; or
(b) an amount of payment greater than that available to a participant.
(5) (a) The service, disability, or survivor retirement benefit payments or withdrawals of member contributions may be apportioned to an alternate payee by directing payment of:
(i) an actuarially equivalent amount payable for the life of the alternate payee; or
(ii) a fixed amount, to be deducted from the participant's benefit, of no more than the amount payable to the participant. A fixed amount must be payable for a determinate period of time not greater than the life of the participant or the life of the benefit recipient under a retirement allowance elected pursuant to 19-20-702.
(b) (i) When a family law order directs payment of an actuarially equivalent amount payable to the alternate payee, either the amount of the participant's retirement benefit to be transferred to the alternate payee must be expressed as a percentage share of the retirement benefit payable to the participant or the percentage share must be readily determinable based on the factors provided in the family law order. The participant's benefit must be reduced by the amount determined under this subsection (5)(b)(i).
(ii) The amount payable to the alternate payee, calculated under subsection (5)(b)(i), must be actuarially adjusted to provide a benefit payable for the alternate payee's lifetime.
(iii) A copy of the alternate payee's birth certificate must be submitted with the family law order.
(6) If a participant elects to withdraw the accumulated contributions and forfeit all rights to service, disability, or survivor benefits, the alternate payee is entitled to a lump-sum payment up to the total fixed amount or equal to the percentage share of the participant's benefit transferred to the alternate payee as directed in the family law order.
(7) Retirement benefit adjustments for which a participant is eligible after retirement must be apportioned between the participant and the alternate payee receiving an actuarially equivalent amount in the same manner as determined under subsection (5)(b)(i).
(8) Payments of monthly benefits to the alternate payee must commence on the latest of the following dates:
(a) the date the participant begins receiving benefits; or
(b) the first day of the month following receipt of a certified family law order and approval of the family law order by the retirement system.
(9) The board may assess a participant or an alternate payee for all costs of reviewing and administering a family law order, including reasonable attorney fees. The board may adopt rules to implement this section.
(10) Each family law order establishing a final obligation concerning payments by the retirement system must contain a statement that the order is subject to review and approval by the board.
(11) If the participant retired on a disability retirement benefit and the benefit is subsequently canceled pursuant to 19-20-903 or 19-20-905, the alternate payee's payments also terminate. When the participant again qualifies for retirement benefits, the amount payable to the alternate payee must be recalculated pursuant to this section.
(12) (a) In every circumstance, an actuarially equivalent amount payable to an alternate payee must terminate upon the death of the alternate payee. The amount may not be devised, bequeathed, or otherwise transferred by the alternate payee.
(b) A family law order may expressly provide that a fixed amount payable to an alternate payee may be transferred upon the death of the alternate payee to a beneficiary designated by the alternate payee. If a family law order does not expressly authorize an alternate payee to designate a beneficiary or if there is no beneficiary designation on file with the retirement system at the time of the alternate payee's death, the fixed amount payable to the alternate payee reverts to the participant or to the joint annuitant or beneficiary of the participant. A fixed amount payable to an alternate payee may not be devised, bequeathed, or otherwise transferred by the alternate payee in any other manner.
(13) The retirement system shall give effect to a family law order in a manner that conforms with all other applicable law pertaining to the administration of the retirement system. A family law order may not be construed to provide rights or benefits to any person beyond those rights or benefits expressly provided by law.
History: En. Sec. 9, Ch. 111, L. 1995; amd. Sec. 8, Ch. 442, L. 1997; amd. Sec. 5, Ch. 90, L. 2007; amd. Sec. 3, Ch. 282, L. 2009; amd. Sec. 5, Ch. 59, L. 2011; amd. Sec. 2, Ch. 39, L. 2017.