Divorce decrees often include terms regarding the division of property, like bank accounts and real estate, but these court orders do not always have the authority to distribute every asset. Typically, a qualified domestic relations order (QDRO) must be used to divide and distribute rights to pension funds and certain other retirement accounts.
Under the Employee Retirement Income Security Act (ERISA), a QDRO is required to establish an alternate payee of qualifying retirement accounts. However, ERISA was not amended to reflect this requirement for pension plans until 1984, with the law going into effect on January 1, 1985. Administrators of retirement plans had the discretion to treat divorce decrees entered prior to that as QDROs.
Samaroo v. Samaroo
In the case of Samaroo v. Samaroo, the lower court ruled that the amended divorce order was not a QDRO capable of awarding Robichaud (the wife) the pension benefits she sought. The U.S. Court of Appeals affirmed this ruling.
Background of Samaroo v. Samaroo
Louise Robichaud and Winston Samaroo were divorced in October 1984, and their divorce decree incorporated a settlement agreement concerning Robichaud’s rights to Samaroo’s AT&T Management Pension Plan benefits. While the agreement gave Robichaud rights to Samaroo’s retirement funds, it did not address survivor’s annuity.
Almost three years after the divorce, Samaroo passed away while still employed at AT&T. He did not live long enough to qualify for his pension payments, so there were no pension benefits that became payable according to the divorce settlement agreement. The pension plan also included a pre-retirement survivor annuity for the surviving spouse of a plan participant, but no annuity is available if there is no surviving spouse.
At the time of Robichaud’s divorce from Samaroo, the Retirement Equity Act of 1984 had not been enacted, so divorce orders entered prior to the updated law could be treated as QDROs. However, the plan denied Robichaud’s claim for pre-retirement survivor’s annuity because the decree did not mention her entitlement to such benefits. She filed a motion to amend the divorce judgment to grant her right to 50% of the pre-retirement survivor’s annuity, and the state court amended the decree to give her this right. The court also stated that whether or not the benefits were payable under the pension plan was a question of federal law.
The federal district court ruled that the amended order did not satisfy all the requirements of a QDRO because it required the plan to provide a benefit not otherwise provided by the plan or to provide increased benefits. Specifically, the district court stated that entitlement to a survivor’s annuity had to be decided as of the day Samaroo died, and the amended decree was an attempt to obtain increased benefits. A ruling was entered against Robichaud, and she appealed.
Awarding Survivor’s Benefits via QDRO
It was determined that conferring survivor’s benefits after said benefits have lapsed would require a plan to provide increased benefits, which is not allowed under section 1056(d)(3)(D) of ERISA. The appellate court affirmed the district court’s ruling in Samaroo.
Navigating the complexities of pensions and retirement benefits can be cumbersome. For clarity, and to get the benefits to which you are entitled, consult with the knowledgeable team at Woodruff Family Law Group.