Opinion ID: 2807039
Heading Depth: 3
Heading Rank: 2

Heading: December QDRO

Text: In rejecting the December QDRO, the Board identified two reasons for its decision by letter dated April 1, 2011. The first delineated issue was the posthumous nature of the submission. According to the Board, “[s]tate law does not require CPRB [Board] to accept QDROs issued after the death of the participant.”33 The second ground for the rejection was the provision, contrary to the model QDRO,34 that required Mrs. Jones to be treated as the Alternate Payee for purposes of calculating survivor benefits. In explanation, the Board stated that this “could result in a violation of the legal requirement under 32 Through specific legislation, Ohio has directed that an alternate payee does not have a survivorship right in a participant’s benefits. See Ohio Rev. Code Ann. § 3105.86 (Anderson 2008) (providing for termination of alternate payee’s right to benefits commensurate with death of participant or alternate payee, whichever occurs first). 33 In further explanation, the Board stated that acceptance of a posthumous QDRO “could result either in a violation of the legal requirement that a QDRO may not require the plan to provide for increased benefits determined on the basis of actuarial value, or in an impermissible diversion of fixed benefits already payable to the death beneficiary specified by the Participant under the Plan.” 34 See supra note 21. 25 applicable state regulations that a QDRO may only divide the marital property portion of the Participant’s Vested Accrued Retirement Benefits.” Citing federal law and model QDRO language that provides for amendments, Mrs. Jones asserts that posthumous QDROs are enforceable. She refers specifically to the following model QDRO language: 13. In the event that the Plan Administrator does not approve the form of this Order, or should it be subsequently determined that amendment of this Order is necessary to ensure its status as a QDRO, then each party shall cooperate and do all things reasonably necessary to devise a form of Order acceptable to the Plan Administrator consistent with applicable law. 14. This Court retains jurisdiction to enforce, revise, modify, or amend this Order insofar as is necessary to establish or maintain its qualification as a QDRO, provided, however, that neither this Order nor any subsequent revision, modification, or amendment shall require the Plan to provide any form or amount of benefit not otherwise provided under the Plan. As an additional basis for her argument, Mrs. Jones looks to both the existence of West Virginia Code § 5-10-44 (2013),35 which provides for the corrections of errors, as well as the Board’s reliance on that provision to alter the benefit payment it was remitting to Mrs. 35 Pursuant to West Virginia Code § 5-10-44(a), “[i]f any change or employer error in the records of any participating public employer or the retirement system results in any member, retirant or beneficiary receiving from the system more or less than he or she would have been entitled to receive had the records been correct, the board shall correct the error.” 26 Akers.36 Mrs. Jones further submits that the circuit court overlooked the fact that enforcement of the December QDRO would be prospective in effect. We agree with the circuit court that the federal law relied upon by Mrs. Jones for posthumous enforcement of QDROs is inapplicable due to distinct statutory provisions found in ERISA that are non-existent in PERS. See Nat’l City Corp v. Ferrell, No. 1:03CV 259, 2005 WL 2143984 (N.D. W.Va. Sept. 1, 2005) (finding posthumous entry of QDRO enforceable due to eighteen-month segregation of benefits period required by ERISA); 29 U.S.C. § 1056(d)(3)(H)(i) (requiring escrow of amounts potentially payable to alternate payee during evaluation of QDRO). While federal law is not controlling, we find the analytical approach employed in Ferrell to be instructive. Addressing the distinction between an interest in benefits and an enforceable interest in benefits, the district court borrowed from the Ninth Circuit’s reasoning to explain: ERISA does not suggest that an alternate payee “has no interest in the plan[] until she obtains a QDRO [;it] merely prevent[s] her from enforcing that interest until the QDRO is obtained.” Thus, “a QDRO only renders enforceable an already-existing interest” and therefore “there is no conceptual reason why a QDRO must be obtained before the plan participant’s benefits become payable on account of his retirement or death.” 36 In March 2011, the Board increased Mrs. Akers’ monthly payment from $1,247.51 to $1,561.44 and paid her a lump sum of $4,395.02 to satisfy the arrearage. 27 Id. at  (quoting Trustees of the Directors Guild of America v. Tise, 234 F.3d 415, 421 (9th Cir. 2000) (emphasis supplied and internal citation omitted). At issue in Ferrell, was the effect of the ex-husband’s intervening death between the issuance of a domestic relations order awarding his former spouse 100 percent of his retirement plan and the preparation of the QDRO required to enforce that right. Upon submission of the QDRO, the plan refused to accept the order on grounds that it was signed after the death of the participant.37 The district court reasoned in Ferrell that the existence of the right giving the alternate payee plan benefits was not itself posthumous; instead, it was the attempt to enforce that right which was posthumous. 2005 WL 2143984 at . Finding that distinction critical, the district court recognized the harsh results that would obtain absent a court’s ability to enforce QDROs posthumously: If an alternate payee’s right to ERISA plan proceeds were automatically cut off once an event occurred that, absent an enforceable QDRO, would make the proceeds payable to someone else, then a plan participant’s retirement, the vicissitudes of court scheduling, or a plan participant’s death, all events beyond the control of the alternate payee, could determine the parties’ substantive rights. However, Congress [did not mean] to ask the impossible, not the literally, but the humanly, impossible, or to make a suit for legal malpractice the sole recourse of an ERISA beneficiary harmed by a lawyer’s failure to navigate the treacherous shoals with which the modern state-federal law of employee benefits abounds. 37 Because the ex-husband died without designating a death beneficiary, his children were eligible to receive his pension benefits by default. 28 Ferrell, 2005 WL 2143984 at  (quoting Metropolitan Life Ins. Co. v. Wheaton, 42 F.3d 1080, 1085 (7th Cir. 1994)). Of further guidance to our consideration of this issue is the Ninth Circuit’s conclusion in Tise that a posthumously-obtained order from state court that fulfilled all the crucial requirements of a QDRO was enforceable. See 234 F.3d at 426. In deciding whether the decedent’s selection of a designated beneficiary could trump the state orders recognizing his former wife’s right to his pension plan proceeds for a substantial child support arrearage, the appellate court surveyed the scheme of ERISA to observe that “whether an alternate payee has an interest in a participant’s pension plan is a matter decided by a state court according to the state’s domestic relations law.” Id. at 421. Continuing its assessment, the court explained that “[w]hether a state court’s order meets the statutory requirements to be a QDRO, and therefore is enforceable against the pension plan, is a matter determined in the first instance by the pension plan administrator, and, if necessary, by a court of competent jurisdiction.” Id. In conclusion, the court reasoned that a QDRO is merely the vehicle by which a former spouse seeks to enforce an interest in a pension plan that has already been determined to exist.38 See id. 38 As the Ninth Circuit observed in Tise: “Through its QDRO provisions, ERISA elevates a plan participant’s legal obligations, commonly to a former spouse or children of a previous marriage, over the participant’s express wishes to provide for other individuals as designated beneficiaries.” 234 F.3d at 425. 29 As part of its examination in Tise, the Ninth Circuit discussed In re Gendreau, 122 F.3d 815 (9th Cir. 1997), a decision in which it concluded that the state court, at the time of the parties’ divorce, both created the ex-wife’s interest in her ex-husband’s pension plan and correspondingly limited her ex-husband’s interest in that same plan. Id. at 818. When the payment order did not initially fulfill the statutory requirement for a QDRO in Gendreau, the court reasoned that the parties’ interests in the pension plan proceeds were unaffected. All that was required to enforce those interests, as the court explained in Tise, was a “return to state court for a revised order that would pass muster as a QDRO.” 234 F.3d at 421. Based on our examination of this state’s public retirement laws, we can find no basis for reaching the conclusion that a QDRO cannot be entered posthumously. See Samaroo v. Samaroo, 193 F.3d 185, 193 (3rd Cir. 1999) (Mansmann, J., dissenting) (“There is good reason to allow state courts some leeway in entering or modifying domestic relations orders even after a participant’s death, or retirement, or other status-altering event.”). Clearly, the model QDRO language anticipates and provides for the necessary continuing jurisdiction in the family court to “revise, modify, or amend this Order insofar as is necessary to establish or maintain its qualification as a QDRO.” See McPhee, 980 A.2d at 1269 (recognizing authority to posthumously clarify QDRO for purpose of conforming order to intent of court’s judgments); Eller v. Bolton, 895 A.2d 382, 395 (Md. App. 2006) 30 (approving trial court’s posthumous amendment of QDRO to reflect parties’ intent where court had retained jurisdiction over QDRO). Addressing the need for flexibility in dealing with the posthumous enforcement of a QDRO, the Tenth Circuit observed in Patton v. Denver Post Corp., 326 F.3d 1148 (10th Cir. 2003): Courts in domestic relations contexts must have the power to effect equitable settlements by responding to newly acquired information or to changes in circumstances. If necessary changes once effected by the state court are not then recognized by plan administrators or by federal courts adjudicating disputes, state courts are effectively stripped of their ability to equitably distribute marital assets in a divorce. Id. at 1154. Accordingly, we hold that a family court has the necessary authority to posthumously enforce, revise, modify, or amend a domestic relations order for the purpose of establishing such order as a qualified domestic relations order. See Griffin v. Griffin, 753 S.E.2d 574, 583-84 (Va. App. 2014) (characterizing QDRO as administrative mechanism to enforce state-created rights through divorce decree and approving posthumous entry of QDRO). Because Mrs. Jones’ proportional marital interest to Mr. Akers’ retirement benefits had been established by the divorce decree that was entered prior to Mr. Akers’ death, she is entitled to posthumously seek enforcement of her right to fifty percent of the retirement benefits earned by Mr. Akers during their marriage. See Files v. Exxonmobil Pension Plan, 428 F.3d 478, 491 (3rd Cir. 2005) (“Nothing in the statute, or in our precedent, requires that 31 a QDRO be in place prior to the death of a plan participant when the QDRO that is ultimately obtained . . . simply seeks to enforce a separate interest in a pension benefit that existed before the death of the plan participant.”); In re Marriage of Padgett, 91 Cal. Rptr. 3d 475, 493 (Cal. App. 2009) (distinguishing between permissible posthumous enforcement of QDROs where interest sought to be enforced was created before death of pension member and impermissible enforcement of QDROs where right is created post-death); cf. Samaroo, 193 F.3d at 191 (refusing to permit wife to amend divorce decree nunc pro tunc after participant’s preretirement death to provide for award of preretirement survivor’s annuity that wife was not previously granted through divorce decree). The decision reached in this case is impelled by our duty to oversee this state’s domestic relations laws. Fulfillment of that most important responsibility requires us to superintend both the provision and enforcement of the equitable disposition of marital assets. If this Court were to prevent Mrs. Jones from obtaining a QDRO to enforce her entitlement to the largest marital asset she and her former husband had, we would be violating our charge to fairly administer the laws of this state. We find it noteworthy that even the Board, in rejecting the December QDRO, recognized the possibility of relief as a result of this appeal. While we disagree with the Board’s determination that the December QDRO was unenforceable based on its posthumous presentment, we agree with the Board’s conclusion that the QDRO was unenforceable due to the inclusion of the provision in 32 paragraph 7(b) providing for Mrs. Jones to be treated as the alternate payee for purposes of calculating survivorship benefits.39 Accordingly, on remand Mrs. Jones is entitled to prepare and submit a QDRO that omits the non-conforming language of paragraph 7(b) and seeks only to enforce a fifty-percent interest in the marital asset of retirement benefits.40 That award of benefits, provided a qualifying order is submitted to and approved by the Board, shall be prospective only.