Opinion ID: 3035622
Heading Depth: 2
Heading Rank: 2

Heading: qdro analysis

Text: Without a doubt, the details required in a QDRO present a drafting morass for the lawyer. We recognize the concern expressed by courts and commentators that the failure of domestic relations lawyers to “navigate the treacherous shoals” of ERISA may harm potential beneficiaries. Metropolitan Life Ins. Co. v. Wheaton, 42 F.3d 1080 (7th Cir. 1994) (noting that “[i]deally, every domestic relations lawyer should be conversant with ERISA, but it is unrealistic to expect all of them to be”); see also Daniel N. Janich, When Remarriage Muddies the Waters, 24 FAMILY ADVOCATE 39 (2000) (“Unfortunately, failure to include a survivorship provision in the QDRO often goes undetected until the participant dies or retires, that is, when the survivor benefits irrevocably vest in the current spouse and it is too late to do anything about it.”). Despite these drafting pitfalls, Congress “required that QDROs be specific and clear” because it was “concerned with reducing the expense to plan providers and protecting them from suits for making improper payments.” In re Gendreau, 122 F.3d 815, 817-18 (9th Cir. 1997). The mandated specificity makes sense so that a pension plan is on notice of its exact obligations to a payee other than a plan participant. In practical terms, a well crafted QDRO could avoid precisely the clash of claims presented here. HAMILTON v. WASHINGTON STATE PLUMBING 149 [4] A domestic relations order6 qualifies as a QDRO only if it meets the “specificity” requirements set forth in § 1056(d)(3)(C): (1) the order must specify the name and mailing address of the alternate payee and the affected plan participant, (2) the amount or percentage of the participant’s benefits to be paid or the means by which that amount will be determined, (3) the number of payments or time period to which the order applies, and (4) each plan to which the order applies. In addition, under § 1056(d)(3)(D), a QDRO must not (1) require the plan to provide any type of benefit not otherwise provided, (2) require the plan to provide increased benefits, or (3) require benefits to be paid to an alternate payee which must be paid to another alternate payee under another QDRO.7 [5] We require substantial compliance with these requirements, Tise, 234 F.3d at 420, and have rejected an unduly narrow reading of these requirements. Stewart, 207 F.3d at 1155 (recognizing that such a reading may frustrate Congressional purposes “by making it unreasonably difficult for domestic relations orders to qualify as QDROs”) (quoting Hawkins v. Commissioner of Internal Revenue, 86 F.3d 982, 991 (10th Cir. 1996) (emphasis added)). We have, however, also echoed the Tenth Circuit’s concerns that an overly expansive interpretation may render the specificity requirements toothless. Stewart, 207 F.3d at 1155 (rejecting the suggestion that ERISA’s specificity requirements may be eliminated alto- 6 A “domestic relations order” is defined as any “judgment, decree or order” concerning “the provision for child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent of a participant” that is “made pursuant to a State domestic relations law (including a community property law).” Id. at § 1056(d)(3)(B)(ii)(I)- (II). 7 The issue of whether a domestic relations order meets the statutory requirements of a QDRO, and therefore is enforceable against the pension plan, is determined in the first instance by the pension plan administrator, and, if necessary, by a court of competent jurisdiction. See Tise, 234 F.3d at 421; see also 29 U.S.C. § 1056(d)(3)(H)(I). 150 HAMILTON v. WASHINGTON STATE PLUMBING gether in certain cases); Hawkins, 86 F.3d at 992 (“Nowhere . . . has Congress implied that its factual requirements are optional”). The pivotal question is whether the dissolution order “clearly contains the information specified in the statute that a plan administrator would need to make an informed decision.” Stewart, 207 F.3d at 1154 (internal quotation marks omitted). Here, the paucity of relevant information in the dissolution order compels a negative answer. Exhibit A to the Decree of Dissolution is a list of property to be distributed to the husband. The only mention of the children and the pension is the cryptic reference with respect to each pension plan that the husband “shall name the children of the marriage, David and Sarah, as the beneficiaries under the pension in lieu of life insurance which he is presently unable to obtain, which obligation shall terminate when the youngest child reaches 18 years of age.” As the Plans pointed out in rejecting the Children’s claim, the order requires the husband to designate the Children as beneficiaries but does not require any action by the Plans, does not assign death benefits to the Children, and does not specify when payments begin or the amount, calculation, or form of the payments.8 Nor does the order deal with the issue of the surviving spouse annuity. [6] The required details are not hypothetical hurdles. Under the Plans, before the Children reached maturity, Michael or his qualified beneficiary was potentially eligible for a variety of pension benefits, such as a disability pension, an early retirement pension, death benefits and survivor benefits. The 8 The Plans also point out that the dissolution order does not identify the Children as “Alternate Payees” under the Plans. This deficiency alone would not have posed a particular hurdle to finding a valid QDRO. See Hawkins, 86 F.3d at 990 (explaining that even though the participant’s former spouse was not “specifically designated” as an alternate payee in the QDRO, she clearly “come[s] within the statutory definition of an ‘alternate payee’ ”). HAMILTON v. WASHINGTON STATE PLUMBING 151 dissolution order neither lays out what pension benefits are at issue nor allocates payment of the benefits. [7] The district court determined that the references in the dissolution order met the requirements for a QDRO. On appeal, the Plans argue that “QDRO or no QDRO,” the statute mandates payment to the surviving spouse. The dissolution order did not, in our view, qualify as a QDRO. Nonetheless, because of the ambiguity of the Plans’ position on appeal— that is, whether they actually challenge the district court’s finding—we give the Children the benefit of the doubt and proceed with the analysis under the statute. Absent a QDRO, the Children would not even be in a position to parse the statutory provisions.