Opinion ID: 2306415
Heading Depth: 2
Heading Rank: 1

Heading: The Role of QDROs in the Distribution of Retirement Benefits After a Divorce

Text: [¶ 18] In general, the right of a public employee to any kind of benefit under the MSRS may not be assigned. See 5 M.R.S. § 17054 (2008). However, the statute contains several exceptions to this general rule, one of which is that [t]he rights of a member, retiree, beneficiary or other payee under [the MSRS] are subject to the rights of or assignment to an alternate payee under a qualified domestic relations order in accordance with section 17059. 5 M.R.S. § 17054(4). Thus, because state retirement benefits are normally non-transferable, when a divorce court seeks to divide one party's MSRS retirement benefits as part of a divorce judgment, as was the case between Sharon and John McPhee, it is not enough to indicate the same in the divorce judgment. To successfully effectuate a transfer and initiate the payment of benefits directly from the MSRS to the receiving party, known as the alternate payee, the parties must import the relevant terms of the divorce judgment into a domestic relations order and submit it to the MSRS for a determination as to whether it is qualified. See id.; 5 M.R.S. § 17059(1) (2008). [¶ 19] Section 17059 generally governs the qualification and implementation of QDROs. 5 M.R.S. § 17059 (2008). Section 17059(1) establishes that the executive director of the MSRS, or the executive director's designee, has exclusive authority to determine whether a domestic relations order is ... qualified. [8] 5 M.R.S. § 17059(1). [¶ 20] Once a proposed QDRO is received, the statute does not charge the executive director with determining whether it squares with the intent of the parties or the divorce court as expressed in a separate settlement agreement or divorce judgment, and explicitly prohibits the MSRS from being made a party to the divorce action. See 5 M.R.S. § 17059(2). Rather, the executive director's duty is a narrow one: to determine whether the QDRO meets specific statutory criteria set forth in 5 M.R.S. § 17059(4) and (5). These criteria include the requirements that the QDRO be sufficiently specific concerning the exact division of benefits, 5 M.R.S. § 17059(4)(B), and that the QDRO not require the retirement system to provide a type or form of benefit or an option not otherwise provided by the retirement system. 5 M.R.S. § 17059(4)(E). [9] The statute makes no provision, however, for the MSRS to assess a proposed QDRO in relation to the related settlement agreement, divorce judgment, or other documents. [¶ 21] If a party disputes a decision of the MSRS regarding the qualification of a proposed QDRO, the party may appeal to the Board in a proceeding separate from the divorce judgment, or may petition the divorce court that issued the order to amend the order so that any deficiencies can be corrected and the order may become qualified. See 5 M.R.S. §§ 17059(6)(B), 17451 (2008). Exclusive authority to modify and enter a QDRO rests with the divorce court. See Jed-Harbage v. Harbage, 2003 ME 74, ¶¶ 11-13, 825 A.2d 348, 352-53 (concluding that while the divorce judgment was ambiguous, the QDRO was not and was more in line with the terms of the 401(K) plan it distributed); see also Greenwood v. Greenwood, 2000 ME 37, ¶ 9, 746 A.2d 358, 360 (If the divorce judgment is ambiguous, the court has the inherent and continuing authority to construe and clarify its judgment....) (quotation marks omitted, emphasis added).