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RightingtheDivorceJudgment:CreatingaSolidFoundationforthe(Q)DRO

andAvoidingMalpracticeClaims

27 October 2017

Presented By:

Stacey D. Smith B. Kevin Burgess Stacey Smith Law Watkinson Laird Rubenstein PC 207 E. 5th Ave, #244 101 E. Broadway, Ste. 200 Eugene, OR 97401 PO Box 10567 [email protected] Eugene, OR 97440 541.504.6985 [email protected] 541.484.2277

Mark Johnson Roberts Deputy General Counsel Oregon State Bar 16037 SW Upper Boones Ferry Road PO Box 231935 Tigard, OR 97281-1935 [email protected] 503.431.6363

Co-Hosted By The Family Law Section of the Lane County Bar Association &

The Lane County Family Law Advisory Committee

RightingtheDivorceJudgment 2

TABLE OF CONTENTS

Glossary of Abbreviations p. 3

I. INTRODUCTION p. 3

II. PROFESSIONAL / ETHICAL CONSIDERATIONS #1 p. 4

III. STRATEGIES TO AVOID THE MOST COMMON ERRORS p.5

IV. PROFESSIONAL / ETHICAL CONSIDERATIONS #2 p. 11

V. POTENTIAL DRAFTING APPROACHES & GENERAL HYPOTHETICALS p. 11

VI. OREGON PERS/OPSRP: POTENTIAL DRAFTING APPROACHES &HYPOTHETICALS p. 16

VII. GARDEN VARIETY DIVORCES (DBPs, DCPs): POTENTIAL DRAFTINGAPPROACHES & HYPOTHETICAL p. 26

VIII. TO RESERVE JURISDICTION OR NOT? p. 30

Appendix

APP – 1 2015 ORS 107.452 – Reopening case if assets discovered after entry of judgment APP – 2 2015 ORCP Rule 71 – Relief from Judgment or Ordser APP – 3 Guidance & Q&A from PLF re: standard of care/malpractice issues APP – 4 Kevin Burgess’ DCP checklist APP – 5 Larry Gorin’s QDROs & Participant Loans APP - 6 Kevin Burgess’ DBP checklist

Presentation Slides


There’s a test at the end of this CLE – it’s the next client who walks into your office! Glossary of Abbreviations: AP – Alternate Payee (eg., non-employee, non-member spouse or former spouse) COLAs – Cost of Living Adjustments DBP – Defined Benefit Plan DCP – Defined Contribution Plan DOD – Date of Divorce DOM – Date of Marriage DOS – Date of Separation FSSA – Former Spouse Survivor Annuity GJ – General Judgment M – Member MSA – Marital Settlement Agreement P – Participant (eg., member, employee-spouse) (Q)DRO – (Qualified) Domestic Relations Order (Q)PRSA – (Qualified) Pre-retirement Survivor Annuity

I. INTRODUCTION The retirement benefit disposition language in your GJ should resolve all substantive issues and serve as a reliable roadmap for the (Q)DRO; in practice, the majority of the time it doesn’t. This CLE aims to provide general divorce counsel with information and resources needed to fulfill professional standards of care by identifying and resolving substantive retirement benefit issues presented in your case before the GJ is entered. The result: a GJ that provides an adequate foundation for the subsequent DRO(s). GJs usually have one or more of the following shortcomings:

• Failure to identify retirement plan(s) by name (omission or misnomer) • Omission / silence re: the asset or critical, substantive issue(s) concerning the

asset (omission or incomplete property disposition) • Impossibility: awarding relief that is inapplicable to / unavailable under the

relevant retirement plan (most commonly, using account-based plan language to attempt to dispose of defined benefit plan)

• Ordering unenforceable, impossible or impractical schemes (eg., awarding unassignable interest; requiring joint selection or joint retainer of DRO counsel; imposing unworkable or unrealistic attorney fee reimbursement provisions)


• Using the term “marital portion” but failing to define it, or to define adequate mechanism for determining ‘marital portion’

• Most frequent and potentially most devastating error: awarding AP a percentage or dollar amount from a non-retired Oregon PERS member’s Tier Program “account.” More about this later.

II. PROFESSIONAL / ETHICAL CONSIDERATIONS #1 The unambiguous language in the Judgment dictates the rights and interests of the parties in the retirement plan benefits at issue and the QDRO may not deviate from or otherwise modify those rights and interests. Tough v. Tough, 259 Or App 265, 313 P3d 326 (2013) http://law.justia.com/cases/oregon/court-of-appeals/2013/a150941.html From Mark Johnson Roberts (MJR): The first ethical duty of a lawyer is to provide competent representation. RPC 1.1 What does competent representation require in these circumstances? It requires planning and foresight.

• DROs will be prepared at the very end of the case. They can be done as part of the general judgment, but almost always they are handled by a supplemental judgment.

• The parties will be exhausted and they won’t want to spend any more money.

Your job is to prepare your client for the fact that this expense and procedure will need to be undertaken, perhaps even by setting aside the money for it in your trust account. It makes sense as well to have a conversation with opposing counsel about who will prepare the DRO and how it will be paid for.

• Second, and this is the point of today’s presentation, get the judgment right the first time and avoid DRO problems arising at the last minute (or worse, arising after the GJ is entered).

The next time you are tempted to tell yourself “I will let the QDRO lawyer work out the details after I get this GJ filed,” please consider the following:


#1 Property awards are not modifiable. https://www.osbar.org/secured/barbooksapp/#/section?doc=fam12_sec_6-9-8

“§6.9-8 Modification of a Property Judgment: The provisions for the division of property in a judgment of dissolution are “binding and beyond the power of the court to modify.” Prime v. Prime, 172 Or 34, 49–50, 139 P2d 550 (1943). This is true even when the parties have submitted to the court a stipulated order modifying the property division portions of a judgment of dissolution. The court has only the authority granted to it by statute, and because the court does not statutorily have the ability to modify a property division, it cannot modify the judgment even though both parties want it. The court-ordered modification is void. Spady v. Graves, 307 Or 483, 488–489, 770 P2d 53 (1989). The court’s authority to modify a judgment that incorporates a settlement agreement rests on the statute, not on the agreement. “To hold otherwise would contradict the general rule that the authority of the court in the exercise of its domestic relations jurisdiction is limited to whatever has been conferred by statute.” Matter of Marriage of Edwards, 124 Or App 646, 649, 863 P2d 513 (1993), adhered to as modified on recons., 127 Or App 489 (1994).” – OSB Bar Books, Family Law (2013 rev.) Chapter 6, ‘Property Rights and Division’ §6.9-8

#2:‘OmittedAsset’ReliefisLimitedbyStatute–APP-1

ORS107.452https://www.oregonlaws.org/ors/107.452

#3ReliefFromJudgmentisLimitedbyStatute–APP-2

ORCPRule71https://oregoncivpro.com/orcp-71-relief-from-judgment-or-

order/

#4: Guidance from the PLF - APP-3

III. STRATEGIES TO AVOID THE MOST COMMON ERRORS

1. Diligent Discovery Efforts – know what Plan and what TYPE of plan you are dealing with! MRJ: Sufficient lead time is needed to get the information you need from the retirement plan administrator(s) in your case.

2. Checklist Analysis – address all substantive issues! 3. Consult with DRO attorney early and often in the case and at the very least

before MSA/GJ – create a solid, enforceable retirement distribution scheme!


Defined Contribution Plans (DCPs) - Review DCP Checklist - APP-4 - Pre-marital DCP account balances?

• Should marital property award include only post-DOM contributions and appreciation?

• Traceability: What if DOM account balance is unknown and neither party has a statement? What if Plan record-keeper does not have records back to DOM?

• Were any Participant loan balances that existed on the DOM subsequently paid off using marital assets/income? (DOM loan balance inclusion or exclusion?)

• Larry Gorin’s Loan Balance Treatment sheet - APP-5

• Sample language: “The Marital Portion is defined as the difference between A and B, wherein ‘A’ equals Husband’s XYZ Plan account balance as of 31 December 1999 (excluding/including loan balances as of that date) and ‘B’ equals Husband’s XYZ Plan account balance as of __ ______ 2017 (excluding/including loan balances as of that date).” CAVEAT #1: A and B must be sorted out before the QDRO is entered but not necessarily before the GJ is entered. CAVEAT #2: Whether loan balances will be included or excluded must always be determined on a case by case basis.

IRAs:

• Usually a DRO is not needed, but the amount or percentage to be transferred must be expressed in a court order

• As a general rule, the amount or percentage must be determined as of the date on which the IRA custodian transfers funds to recipient spouse

• Cannot award investment earnings (gains, losses) from some past date through date of transfer to transferee** (limited exception - see drafting example, below)

• IRS assesses 10% early withdrawal penalty on transferee under age 59.5 who takes distribution (as opposed to direct rollover) (versus qualified plan distribution to AP under a QDRO, which is exempt from penalty; proceed with caution here)

• IRA Drafting Example: Award of IRA Benefit to Wife. Wife is awarded and assigned [_____ percent (___%) of] or [$________ from] Husband’s Fiduciary Trust CO NH Custodian Traditional IRA fbo John B. Doe, account number ****5678, valued as of ____________ unless the custodian cannot value as of that date, in which case then to be valued on the date of transfer. Time is of the essence


to transfer to Wife. Wife’s assigned share will derive pro rata from the investments in which the IRA is allocated as of the date of transfer. Wife’s share shall be transferred by direct rollover to her receiving IRA. Each party must execute all documents reasonably required by the custodian(s) to administer the award. Administrative fees charged by the custodian in this context will be equally allocated between the parties. The assignment to Wife of the above-described interest in Husband’s IRA constitutes a non-taxable transfer as provided in ORS §107.105(3) and IRC §408(d)(6). This order is entered pursuant to the marital property rights of the parties and ORS §107.105(1)(f). Wife will be deemed the distributee of any distribution to her from sums assigned to her under this paragraph and she will pay applicable income taxes on such distribution. Until the custodian has administered the above-described transfer, Husband shall take no actions that may circumvent the terms of this order or diminish or extinguish Wife’s rights or entitlement as provided in this order. Husband represents that he has not taken a distribution or directed a rollover from the IRA at any time since [insert date of last IRA statement on which Wife/counsel relied], at which time the IRA balance was $________. This court retains jurisdiction to amend, enforce or clarify this order or to make further orders as may be necessary to implement the provisions of this order. Husband shall retain as his sole and separate property all remaining interests in his IRA.

Defined Benefit Plans (DBPs)

n Review DBP Checklist - APP-6 Pre-retirement vs. Post-Retirement Context

n First step: Carve out AP’s award. Don’t use “account” language for pre or post retirement DBP awards

n Don’t award ‘gains & losses’ because none exist (but such drafting error may

support a motion to set aside for “mistake or inadvertence” (OCRP 71B), or an argument that a true coverture and/or COLAs was intended)

n Will AP’s award be calculated using true or frozen coverture fraction? Larry Gorin’s Pie Chart. Caveat: military pension law now requires frozen coverture.


n Oregon law favors true coverture. Owens v. Owens-Koenig, 195 Or App 734 (2004); Kiser and Kiser, 176 Or App 627, 632 n 1, 32 P3d 244 (2001) http://scholar.google.com/scholar_case?case=8034781313195949375

n Will AP’s award be a separate benefit interest (based on actuary factors applied to AP) or a shared interest (more like a garnishment)? Consider survivorship benefit issues: if Plan can pay AP award as a separate benefit, then will QDRO direct the Plan to treat it as separate benefit only when benefits commence to AP? Eg., AP may want to maintain a shared interest until benefits commence to AP (is this critical in the PRSA context? (See OPSRP pension plan).

n Should GJ provide for a contingent, shared interest award ‘in the event that the

Plan does not permit AP’s benefit to be paid as a separate benefit’ (eg., a benefit based on AP’s lifetime)? Best examples: FERS & CSRS.

n If only a shared interest award is available under the plan, then failure to require P to elect some form of joint and survivor benefit (or an FSSA through FERS/CSRS) results in termination of AP’s benefit if P predeceases AP.

n Joint & Survivor benefit or FSSA coverage provides various levels of survivor

benefit ‘coverage’. For example, with FERS/CSRS it can be (a) maximum survivor annuity (50%) or (b) some lesser amount, such as 25% or a continuation of AP’s assigned portion of P’s monthly annuity. A substantive issue is “how to allocate the cost of FSSA?” ** Specify how the DRO will allocate the cost of FSSA coverage

n Address pre-retirement survivor benefits (where PRSA is paid in lieu of a normal retirement benefit)


Defined Benefit Plans – Prof Gorin’s “TWO WAYS TO SLICE THE PIE”

LARGER SHARE OF A SMALLER PIE (‘Frozen Coverture’ – usually yields smaller AP benefit than ‘True Coverture’ method) (Mahaffey and Mahaffey, 96 Or App 617, 773 P2d 806 (1989) http://scholar.google.com/scholar_case?case=2705939252971843771 Articulation of Award: Alternate payee is assigned and awarded as her sole and separate property an amount equal to the actuarial equivalent of FIFTY PERCENT (50%) of the marital portion (as specified herein) of Participant’s accrued (vested) benefit under the Plan as of the date of dissolution of marriage. The marital portion of Participant’s accrued benefit under the Plan shall be determined by multiplying Participant’s accrued benefit entitlement amount as of the parties' marriage termination date by a fraction the numerator of which is the total number of months of the parties’ marriage coinciding with Participant’s creditable service under the plan, and the denominator of which is Participant’s total number of months of creditable service under the Plan as of the date of termination of the parties’ marriage. This formula is illustrated as follows: Dollar amount of P’s accrued benefit @ x date of divorce

# of months of marriage coinciding w/ P’s creditable service under Plan

________________________________________ Total # of months of P’s creditable service under Plan as of date of divorce

x 50%

SMALLER SHARE OF A LARGER PIE (‘True Coverture’ – preferred method under Oregon law, and usually more favorable to Alternate Payee than ‘Frozen Coverture’ method) Articulation of award: AP is hereby assigned and awarded as her sole and separate property FIFTY PERCENT (50%) of the marital portion (as specified herein) of Participant’s accrued, vested benefit under the plan. The marital portion of Participant’s accrued benefits and benefit rights under the Plan shall be determined by multiplying Participant’s benefit entitlement amount as of Participant’s benefit commencement date or the AP’s benefit commencement date, if earlier, by a fraction the numerator of which is the total number of months of the parties’ marriage coinciding with Participant’s creditable service under the plan, and the denominator of which is Participant’s total number of months of creditable service under the Plan as of Participant’s benefit commencement date or AP’s benefit commencement date, if earlier. This formula is illustrated as follows: Dollar amount of P’s accrued benefit @ x P’s benefit commencement date


________________________________________ Total # of months of P’s creditable service under

Plan as of P’s benefit commencement date or, if earlier, AP’s bene commencement date

x 50%


*****************************

The ‘true vs frozen’ issue is whether participant's service after divorce should be factored in calculating AP’s benefit. AP will want to capture post-dissolution benefit accrual. If, as of DOD, the entire pension benefit was accrued during the marriage and the pension won’t be payable until some future date, then failure to use the true coverture fraction will freeze AP’s benefit at the estimated amount as of DOD. If it was a DCP benefit, the AP award would presumptively accrue earnings through distribution. Moreover, a DBP benefit is based on the plan formula in effect on the date of retirement, not divorce. Special considerations include DBP’s that restructure/revise benefits calculations in the years following the divorce. If Plan calculates benefits based on factors such as ‘service units’ or ‘non-forfeited contributions’, in lieu of or in addition to ‘creditable service time’, the AP could receive a greater benefit under the frozen coverture calculation. See for example Edison Pension Plan.

DBP Retirees

• No separate interest award available to AP • Assignment looks more like garnishment • AP pays taxes on AP’s assigned portion • Form of benefit and availability of survivor benefit (or lack thereof) have

been determined. Caveat: some plans allow P to convert benefit from JT & survivor benefit to self-only benefit (eg., higher monthly amount, benefit terminates upon P’s death) due to divorce, or to change survivor beneficiary due to divorce; GJ & DRO can prohibit P from doing either

• Tailor AP award around form of benefit that P elected at retirement • Will AP benefit revert to P if AP predeceases P? Or will/can Plan

distribute AP’s portion of monthly benefit to AP’s beneficiary (or AP’s estate) until P’s death? Does Plan even allow for that?

• Allocating survivor benefit: if P predeceases AP, can some portion of the survivor benefit (which is payable until AP’s death) be allocated to some other beneficiary designated by P after divorce? * not all plans allow this

• ‘Gap Months’ Issue • Special FERS/CSRS “FSSA” considerations, including “First Order Rule”


IV. PROFESSIONAL / ETHICAL CONSIDERATIONS #2 Confer with DRO counsel during discovery phase (enables you to secure and understand the retirement benefits and options available in your case) Confer with DRO counsel before/during negotiations/proposals/MSA drafting (to secure best, comprehensive terms) Confer with DRO counsel while drafting trial memo Confer w/ DRO counsel before drafting GJ or approving form of GJ Use contingencies if necessary (if A, then B, but if not A, then C + D). MJR: The elements of competence are legal knowledge, skill, thoroughness and preparation. Being thorough in these circumstances means educating yourself about the particular retirement plans involved in the case and the options available for dividing them. You can make that assessment yourself by reading the plan, but a better education can be derived by contacting your DRO lawyer early and often. When I was an appellate lawyer, I taught lawyers to call me whenever they were preparing a trial memorandum. Contacting DRO counsel should ideally be done during discovery—if for no other reason than to ensure that the discovery is properly obtained—but in any event you should be contacting your DRO lawyer and your appellate lawyer just like the rest of your trial experts.

V. POTENTIAL DRAFTING APPROACHES & GENERAL HYPOTHETICALS

HYPOTHETICAL #1: The ‘CATCH-ALL’ (more accurately, the ‘CATCH SOME’). Divorce lawyer calls DRO lawyer the day before (or day of) trial, unsure whether participant has DCP or DBP or both, and unsure of the names of the plans. But s/he believes that all interests in retirement plans were acquired during the marriage. It’s a long-term marriage and Husband changed careers mid-marriage (or changed from private sector to govt sector employment). The following language assumes that all benefits were acquird during the marriage or that the intent is to include pre-marital balances/accrual. Only one spouse has retirement benefits, while the other spouse (AP) has been a homemaker or a wage-earner without retirement savings.


“DISTRIBUTION OF RETIREMENT BENEFITS. Husband has marital property interests in retirement plans and related benefits, all of which were acquired during the marriage. The just and proper disposition of such interests shall be as follows: (1) Defined Contribution Plans. As to any defined contribution retirement plan(s), Spouse #1 will be assigned fifty-percent (50%) of Spouse #2’s total account balance as of [DATE or EVENT] (the “determination date”), [INCLUDING A PROPORTIONATE SHARE OF EMPLOYER CONTRIBUTIONS ATTRIBUTABLE TO HUSBAND’S COMPENSATION EARNED THROUGH THE DETERMINATION DATE, WHETHER OR NOT FUNDED AS OF THE DETERMINATION DATE]. In calculating Spouse #1’s interest, loan balances if any shall be [INCLUDED or EXCLUDED]. The award to Spouse #1 will be adjusted for interest (gains, losses) accruing from the plan valuation date on or immediately preceding the determination date through the plan valuation date on or immediately preceding the date of distribution to Spouse #1. Each party shall pay [50%] of any administrative fees assessed by the Plan(s) as part of the QDRO review and administration process, unless otherwise required by the terms of the Plan. Until such time as the QDRO is approved by the plan for administration, Spouse #2 shall take no action to circumvent the terms and provisions of this paragraph or to diminish or extinguish the rights or entitlement of Spouse #1 as provided for herein. If Spouse #1dies before her benefits commence, then to the extent allowable under the plan(s), any benefits under the plan(s) that have been or would have been assigned to Spouse #1 under this paragraph will be paid to Spouse #1’s beneficiary(ies) designated in accordance with the plan(s) procedures or if none are designated then to Spouse #1’s estate. (2) Defined Benefit Plans. As to any defined benefit plan(s), Spouse #1 shall be assigned, as his/her separate interest, fifty-percent (50%) of the martial portion of Spouse #2’’s accrued retirement benefit, including proportionate (pro rata) COLA adjustments, subsidies and increased benefits. The ‘marital portion’ of Spouse #2’s accrued benefit and benefit rights under the plan shall be determined by multiplying her/his benefit entitlement amount as of the benefit commencement date by a fraction, the numerator of which shall equal Spouse #2’s creditable service accrued under the Plan as of the date of dissolution of marriage, and the denominator of which shall equal Spouse #2’s creditable service accrued under the Plan as of the benefit commencement date. Spouse #1 will be treated as Spouse #2’s beneficiary for purposes of receiving a proportionate share of any pre-retirement survivor benefit payable under the Plan. Until such time as the QDRO is approved by the plan for administration, Spouse #2 shall take no action to circumvent the terms and provisions of this paragraph or to diminish or extinguish the rights or entitlement of Spouse #1 as provided for herein. If Spouse #1 dies before her/his benefits commence,


then to the extent allowable under the plan(s), any plan benefits that would have been assigned to Spouse #1 will be paid to Spouse #1’s beneficiary(ies) designated in accordance with the plan(s) procedures, or if none are designated, then paid to Spouse #1’s estate. (3) [SPOUSE #1] will retain counsel to prepare the QDROs to implement the terms of the above paragraphs. Such counsel will represent only [SPOUSE #1]. [SPOUSE #2] may retain counsel, at [SPOUSE #2’s] sole expense, to review the proposed QDRO(s) and provide approval or objection to the form of such QDRO(s). SPOUSE #2 will reimburse SPOUSE #1 for one-half of SPOUSE #1’s QDRO fees within 30 days of SPOUSE #1’s written request and presentation to SPOUSE #2 of primary documentation of such expense. In the context of reimbursing SPOUSE #1, SPOUSE #2 will be entitled to a credit in the amount of [$______ / or 50% of SPOUSE #2’s QDRO attorney fees / or?? get creative BUT BE PRACTICAL], whichever is less, in the event that SPOUSE #2 secures and pays for independent counsel to review the QDRO(s) prepared by counsel for SPOUSE #1. (4) This court retains jurisdiction over the parties and their retirement benefits, to clarify, correct or amend the award of retirement benefits as described herein and to enter domestic relations order to carry out the intent of the court as expressed hereinabove, and to ensure that the assignment(s) described above, as contemplated by the Court, comply with the terms and provisions of the retirement benefit plans, and governing law and regulations applicable to said plans. MJR: Avoid “retaining jurisdiction” language. It is meaningless and causes confusion. The jurisdiction of Oregon courts is set by statute. The court either has jurisdiction to decide a post-judgment motion, or it doesn’t. OFFSETS & SIMILAR SITUATIONS Offset using DBPs should be avoided unless (1) there’s no other equitable option and (2) there’s been a professional valuation of the DBP interest. Offsets are commonly seen in DCP contexts. We often trade one DCP for another, or use one of several DCP accounts to equalize the DCP distribution. It’s feasible and fairly straight-forward on paper (if you don’t look too deep in terms of comparative investment and other factors among plans). There are some moving targets you may want to consider, e.g., varying and unequal investment performance among plans and different QDRO fees. DRO attorneys and divorce


attorneys are not financial advisors and should be reticent to trade a DCP account for a non-retirement asset, or trade an IAP or IRA for a DCP(without full disclosure “I am not a financial advisor and you should consult with a financial advisor for guidance about making prudent financial investment decisions”). Nonetheless we see this and do this all the time; it is a case by case analysis. This is a good example of when to write a CYA letter to the client. Even though several DROs means more attorney fees, that approach may be the only practicable or equitable approach if the goal is to ensure that the parties equally reap the gains and bear the losses of the investments.

HYPOTHETICAL #2: Only one party has DCP benefits, which are distributed among several DCPs; parties won’t commit to using one DCP QDRO to equalize the distribution of the several DCPs, but want to leave the door open: “Disposition of Husband’s Defined Contribution Retirement Plan Benefits. Husband participates in the Coffee Roasters Pension Employee-Directed 401(k) Plan, the Coffee Grinders Pension Trust Money Purchase Plan, and the Coffee Distributers Pension Plan. Pursuant to a Qualified Domestic Relations Orders (QDRO) to be filed as soon as practicable following entry of this divorce judgment, Wife is awarded and will be assigned fifty-percent (50%) of [the Marital Portion] of Husband’s defined contribution plan account balances, determined as of ___ __________ 201X (division date), plus earnings (gains, losses) accruing on her award from the valuation date on or immediately preceding the division date through the plan valuation date on or immediately preceding the dates of distribution. [IF THERE IS OR MAY BE A PRE-MARITAL ACCOUNT BALANCE: The ‘Marital Portion’ is defined as the difference between A and B, wherein ‘A’ equals Husband’s plan account balances as of [[DOM]] (including Participant loan balances outstanding as of that date to the extent such loan balances were repaid during the marriage) and ‘B’ equals Husband’s plan account balance as of the valuation date (excluding/including loan balances)]. If and only if the parties agree, Wife’s equalizing award will derive from the retirement plan(s) having the greatest vested account balance; this approach is intended to reduce QDRO attorney fees and (if any) QDRO administration fees assessed by the plan(s); but if the parties cannot agree on the details of this ‘offset’ assignment, or on a form of QDRO that implements that approach, then a QDRO will be filed with respect to each Plan. Husband shall be solely liable for and shall hold Wife harmless from outstanding participant loan balances existing as of the valuation date, if any. Husband shall retain as his sole and separate property all remaining interests in his defined contribution retirement plan benefits, which are not expressly awarded to Wife hereunder and under the subsequent QDRO(s)”.


HYPOTHETICAL #3

Both spouses have DCP benefits; one party has more DCP benefits than the other; could do 4 QDROs, could do one equalizing QDRO; or other scenarios. Parties don’t have enough information to commit to these terms and want to leave the door open: “Wife participates in the PetCo 401(k) Plan and the Veterinary Hospital 401(a) Plan. Husband participates in the BioChem Industry 401k Plan and the Technik Inc Retirement Savings Plan. As of [30 June 2017], the sum of Wife’s total vested plan account balances was $285,000. As of [30 June 2017], the sum of Husband’s total, vested plan account balances was $205,000. No participant loan balances existed against any of these accounts as of [30 June 2017]. [If there were any participant loan balances as of the valuation date, the GJ needs to determine whether to include or exclude such balances in calculating the equalizing amount]. Each party’s interests in such plans will be equalized as of (or as close as administratively feasible to) [30 June 2017]; QDRO assignments will be subject to investment earnings (gains, losses) from the plan valuation date on or immediately preceding such date through the the plan valuation date on or immediately preceding the date of distribution to an alternate payee. If and only if the parties agree, then equalization may be achieved through entry of one Qualified Domestic Relations Order (QDRO); however, if the parties cannot agree to enter one (equalizing) QDRO (including agreement as to which Plan will serve as the equalizing source) then one QDRO will be entered for each Plan.”

HYPOTHETICAL #4: Divorcing parties want to tap into DCP funds to pay off marital debt, and then equalize the remaining DCP balances; how do you articulate that? - Ordering a DCP distribution to AP, requiring AP to use specified amount to pay marital debts & taxes (penalty?) on distribution, and equally dividing the DCP balance(s): “Wife is awarded and shall be assigned under a Qualified Domestic Relations Order (Q‘DRO’) a dollar amount from Husband’s JKL Enterprises 401(k) Savings Plan, determined as of 15 November 2017 or the [next-] closest administratively feasible division date thereto (‘division date’) and adjusted proportionately for investment earnings (gains or losses) from the plan valuation date on or immediately preceding the division date through the plan valuation date on or immediately preceding distribution. Wife’s award shall be calculated based upon the following-described formula: $35,000 [assumes that the required distribution described below is not


subject to the IRS's 10% early withdrawal penalty], plus 50% of the remaining 401(k) Plan account balance (all as of the division date). Time is of the essence to file the QDRO following entry of this judgment. Husband shall retain as his separate property all of his Plan account balances remaining after the assignment to Wife under the QDRO. Each party may select a 401(k) remainder beneficiary of his or her choosing following administration of the QDRO. Husband shall retain qualified counsel to prepare the QDRO at his sole expense and Wife shall pay all taxes on the distribution described in the following paragraph. Promptly following the 401(k) Plan’s qualification of the QDRO described above, Wife shall apply for an immediate, lump sum distribution from the Plan in the gross (pre-tax) amount of $35,000, from which the Plan will withhold 20% for estimated federal income tax. Wife shall instruct the Plan to withhold 8% from the gross amount for estimated state income tax; Wife shall use the balance ($25,200) of the distribution to pay the Plan’s QDRO administrative fee (if any) and to satisfy the marital debts identified in sections X.1 through X.6, below (which total $25,200). Wife may elect a larger distribution if she chooses but she must apply $25,200 of the net distribution as described herein.” VI. OREGON PERS/OPSRP: POTENTIAL DRAFTING APPROACHES & HYPOTHETICALS * Police & Fire Units (PFUs) are not assignable to an Alternate Payee (AP) Non Retired Members: ORS Ch 238A benefits (PERS membership began 2004 or later) – Oregon Public Service Retirement Plan (2 components) #1 Individual Account Program (IAP) - basic DCP plan; no loans; must assign as of 12/31 of prior year (exception: PERS will determine on 12/31 of current year if DRO presented to PERS after Jan 1 of the following year -- Special issue: Whether to, and how to, Capture YTD IAP contributions? * Member’s pay stubs show YTD IAP contributions * PERS online Member services provides YTD IAP contribs * Annual PERS Member Statement shows prior year’s IAP contribs


Example #1: Wife is awarded a dollar amount from Husband’s PERS IAP account, equal to 50% of X, wherein ‘X’ equals Husband’s IAP account balances as of 12/31/[prior year], plus Husband’s YTD IAP employee/employer contributions through [DATE – current year]. The award will be established from Husband’s 12/31/[prior year] IAP account balances. Example #2: Wife is awarded a dollar amount from Husband’s PERS IAP account(s), equal to X, wherein ‘X’ equals $50,000 plus 50% of Husband’s YTD employee/employer IAP contributions. This award will be established from Husband’s 12/31/[prior year] IAP account balances. Example #3: Wife is awarded 50% of Husband’s PERS IAP account(s) as of 12/31/[prior year], plus 50% of Husband’s of his employer’s YTD IAP contributions. This award will be established from Husband’s 12/31/[prior year] IAP account balances. The formulae defined in Examples 1-3 above, must be solved before the DRO can be prepared, as PERS will not administer the above language. The divorce lawyer, or the DRO lawyer, can work the numbers out, provided that they can access to the necessary data. -- Are IAP distributions to AP subject to 10% early withdrawal penalty? #2 Oregon Public Service Retirement Program (OPSRP) Pension Plan: It’s structured as traditional DBP (don’t forget pre-retirement survivor benefit & disposition of AP award if AP predecease Member before benefits commence). ORS Chapter 238 benefits (PERS membership began in 2003 or earlier). These Members have Tier One / Tier Two Program benefit and – if Member continued PERS-covered employment beyond 2003 – an IAP Account.


Tier One / Tier Two Program – ‘hybrid plan’ with DCP and DBP features. Key considerations: * Separate Account Award (w/ or w/out money match; 12/31 valuation); or, * Shared Interest Award (AP award can be converted to separate benefit based on AP’s lifetime, upon retirement (whether Member retires under Money Match of Full Formula; so best of both worlds) * PERS Tier One/Two Program. How it works: at Member’s retirement, PERS applies retirement benefit calculation that yields Member’s highest benefit; either (1) Money Match formula (account-based benefit calculation: Tier Member account balance plus employer matching dollars) or (2) Full Formula method (frequently yields significantly higher benefit than Money Match; see Hypothetical #5, below). *Thus AP needs to avoid separate Tier account award unless AP is certain that Money Match will yield higher benefit, or willing to risk it. Risk is that AP will leave marriage with less—perhaps far less (and Member with far more) than 50% of the marital portion of Tier benefit. PERS Tier One/Tier Two & IAP Pre-Retirement Guide (overview of retirement options available to PERS retirees): http://www.oregon.gov/PERS/MEM/Tier-One-Tier-Two/Documents/TierOne-TierTwo-Preretirement-Guide.pdf PERS Administrative Divorce Forms: http://www.oregon.gov/pers/MEM/Pages/Divorce-Forms.aspx. Caveat: With the exception of ‘free and clear award’ forms & ‘IAP award of non-retired member account’ form, these forms are neither all-inclusive, nor comprehensive, nor straight-forward. DRO attorneys frequently alter or modify generic PERS divorce form(s) to match the custom DRO. PERS administrative forms should not be used as the DRO except in very limited circumstances. The forms are very useful as a roadmap to identifying the issues regarding PERS & OPSRP plan components.


TIER PROGRAM BENEFIT – TWO VERY DIFFERENT DRAFTING SCENARIOS, OUTCOMES: Scenario #1: Separate Account Award. If this method is used, then AP wants to receive proportionate employer matching dollars (eg., the Money Match) and investment earnings on AP’s award from the valuation date.

HYPOTHETICAL #5 In which Separate Tier Account / Money Match Award is appropriate: Dissolution of a 20-year marriage; Member is an inactive, non-retired (General Service) PERS member; he worked for PERS employer from 1999 to 2003 without any additional PERS service thereafter. Member cannot begin Tier Two “retirement with unreduced benefits” until he turns 60 (yrs old) (Tier One – age 58 / Tier Two – age 60). He will never have 30-yrs of PERS service so his PERS retirement eligibility will be solely age-dependent. http://www.oregon.gov/pers/MEM/Pages/Eligibility-to-Retire-TierOne-TierTwo.aspx) The ‘Account balance + Money Match’ method (as opposed to Full Formula) will yield Member’s highest benefit at retirement. Therefore, awarding Alternate Payee a separate Tier account + Money Match + interest would be appropriate, and the GJ could provide as follows: Award of Separate Tier Program Account: “Petitioner is awarded will be assigned under a DRO, 50% of Respondent’s Tier Two Member account balance determined as of 31 December 2016, with pro rata investment earnings and employer matching funds. Either party may elect any retirement benefit option available to him/her under ORS Chapter 238. Petitioner shall retain qualified counsel to prepare the DRO at his/her sole expense.” Scenario #2 ‘Easy’ Split vs ‘Complicated’ Split - Analysis:

HYPOTHETICAL #6: “His and Hers PERS”:

Date of Marriage (DOM) – June 1998 Marital Property Disposition Date – 1 June 2016 Husband:

• Active, non-retired OPSRP Member • PERS IAP {DCP} acct bal $145,000 on 12/31/2015


• - YTD IAP contribs $3,500 on 6/01/2016 • OPSRP pension plan {DBP} - H’s “cumulative retirement credit” under

OPSRP is 11 years & 6 months • OR Savings Growth Plan {OSGP} – 6/01/2016 balance $40,000

Wife: • Active, non-retired OR PERS Tier Two Program & IAP Member • Tier 2 start date – 1/01/2003 • Service time as of marital property disposition date: 13 yrs + 5 mo • PERS IAP acct bal $125,000 on 12/31/2015 • YTD IAP contribs $2,100 on 6/01/2016 Tier 2 Member Account balance $11,000

on 12/31/2015 • Wife’s current monthly salary - $7,000 • Wife’s normal rtmnt date (age 60 in 2034) w/ 30 yrs creditable service • Wife’s projected, final avg monthly salary @ retirement: $10,000

Tier Two: What To Do? – Analysis: ‘Easy’ Split vs Complicated Split ‘EASY’ SPLIT COMPLICATED SPLIT Immediate Account Split Deferred Interest, Marital Fraction (eg., separate account for AP) (eg., ‘temporary’ shared interest thru retirement eligibility; will convert to ‘separate’ benefit for AP @retirement): Bottom Line: Bottom Line: Yields AP $319/mo Yields AP $1,120/mo Yields Member $4,691 Yields Member $3,890/mo Best choice for AP only if Allows AP to share in Member’s Member retires under highest benefit calculation method Money Match (eg., MM as determined at retirement AND yields highest benefit for M) elect separate benefit option for AP at (or after) M’s earliest retirement eligibility date

AP Award: “50% of M’s PERS Tier AP Award: “50% of marital portion of acct + interest + employer matching M’s Tier benefit per married time funds” ratio” Married Time Ratio: $5,500 x [19 yr @ .075/yr*] = $21,733 # months creditable service during mg total mo. cred. service @ retirement Apply Money Match: $21,733 x 2 = $43,466 avg APR 2004-2015, projected to 2034*


Member’s Full Formula Monthly Benefit calculation: [Final average monthly salary] x [retirement credit] x [1.67%] as applied: [$10,000] x [30] x [.0167] = $5,010** **Member’s Option 1 (self-only) w/out AP award offset

‘EASY’ SPLIT COMPLICATED SPLIT Separate Account Deferred Interest, Marital Fraction Reduction/Deduction AP’s Money Match: $21,733 x 2 = $43,466 AP award (50% of married time ratio) PERS to pay AP lump sum ($43,466) or applied to Full Formula benefit ($5,010): convert to monthly benefit using applicable annuity conversion factor (7.34* for 60 yr/old #mo married service x 50% x $5,010 for 60 y/o): #mo total PERS service $43,466 x .00734 = $319.04 / mo as applied: 161 x 50% x $5,010 = $1,120.29** / mo 360 * from 2016 PERS Tier 1 & 2 / OPSRP Actuarial Equivalency Factors tables ** This amount would vary depending upon AP’s age, given that it would be paid as a separate benefit based on AP’s lifetime (eg., an actuarial equivalent calculated on the basis of AP’s lifetime, to yield an Option 1 benefit) Drafting Tips – General Judgment Language for ‘His & Hers PERS’ Using ‘Complicated’ Split (complicated split section is highlighted in yellow, at section X.3.2, below):

X. DIVISION OF RETIREMENT ASSETS. Each party has marital property interests in various retirement benefits. It is just and proper to equalize the distribution of such benefits as between the parties, as of 1 June 2016. The just and proper disposition shall therefore be as follows:

X.1 Husband participates in the Oregon Savings and Growth Plan (OSGP). He is

awarded one hundred percent (100%) of his current and future OSGP benefits, free and clear of any interest or claim by Wife. This award includes Husband’s right to change his OSGP beneficiary(ies) if he previously designated Wife as his beneficiary.


X.2 Husband participates in the Oregon Public Service Retirement Plan (OPSRP); under OPSRP he has interests in the Individual Account Program (‘IAP’) and the Pension Program. Husband’s OPSRP benefits shall be distributed as follows:

X.2.1 IAP: Wife is awarded and will be assigned $30,700 from Husband’s IAP

account(s) as of 31 December 2015, plus proportionate investment earnings (gains, losses) accruing thereon from 31 Dec 2015 through distribution to Wife. Husband shall retain as his separate property, free from any interest or claim by Wife, the remainder of his current and future IAP account balance(s), along with the right to change his IAP remainder beneficiary at will following PERS’ administration of this award.

X.2.2 OPSRP Pension Program: Wife is awarded and will be assigned fifty-

percent (50%) of the marital portion of Husband’s OPSRP Pension Program benefit, determined as of the earlier of Wife’s or Husband’s benefit commencement date, to be paid according to the reduction method; the marital portion shall equal a fraction, A/B, wherein “A” (numerator) equals Husband’s cumulative retirement credit earned as of 1 June 2016 (and equals 11 years and 6 months), and wherein “B” (denominator) equals Husband’s total, cumulative retirement credit earned at the time of payment. If Husband predeceases Wife before Wife commences OPSRP pension program benefits, then Wife will be assigned a proportionate share of pre-retirement survivor benefits (as Husband’s surviving former spouse). The remainder of Husband’s OPSRP benefit is awarded to Husband. The Court imposes no restrictions upon either party’s ability to elect any form or type of OPSRP pension program benefit otherwise available to such party under ORS Chapter 238A. Wife may apply for and receive a separate benefit option on or after Husband’s earliest OPSRP retirement eligibility date (but no later than the date on which Husband applies for OPSRP benefits), after which PERS will treat Wife’s benefit as a separate benefit option and Wife will have no further interest in Husband’s OPSRP pension program benefit. Husband is awarded as his separate property, free from any interest or claim by Wife, the remainder of his OPSRP Pension Program benefits.

X.3 Wife participates in Oregon PERS and in OPSRP IAP. Wife’s PERS and IAP

benefits shall be distributed as follows: X.3.1 Wife is awarded one hundred percent (100%) of her current and future IAP

Member employee and employer account balances, free and clear of any interest or claim by Husband. This award includes Wife’s right to change her IAP beneficiary(ies) if she previously designated Husband as her beneficiary.


X.3.2 Tier Two: Husband is awarded and will be assigned fifty-percent {50%} of the marital portion of Wife’s PERS Tier Two benefit determined as of the earlier of Husband’s or Wife’s benefit commencement date, to be paid according to the reduction method; the marital portion shall equal a fraction, A/B, wherein “A” (numerator) equals Wife’s accrued service time (X years and Y months) determined on 1 June 2016, and wherein “B” (denominator) equals Wife’s total accrued service time determined at time of payment [will this include sick leave as of DOD if Wife receives service credit for such, or voluntary purchase/buy back credits ?]. Husband’s assigned interest may be converted to a separate benefit accrued to the benefit commencement date and based on his lifetime. Husband’s assignment will include a pro rata portion of all Tier Program benefits (including COLAs and similar adjustments, increases, matching benefits, etc.) payable or available to Wife or her beneficiary, whether due to early or normal retirement, pre-retirement death, disability or withdrawal. Each party may elect any form of benefit allowed to such party under ORS Chapter 238. Wife may designate a beneficiary of her choosing to receive any portion of the benefit not awarded to Husband; however, she must designate Husband as her primary pre-retirement beneficiary to receive [fifty-percent (50%)] of the Martial Portion of Wife’s Tier Program benefit in the event Wife predeceases Husband before Husband’s benefit commencement date. Wife shall make such designation in a form that is acceptable to PERS, and she shall not revoke such designation until benefits commence to Husband. If Husband predeceases Wife before Husband’s Tier Two benefit commencement date, then his assigned share of Tier Two benefits will be paid to his designated beneficiary or in the absence of such designation, to Husband’s estate. Wife may not, without Husband’s written, notarized consent, withdraw from Wife’s PERS Tier Program Member Account(s) prior to attaining her retirement eligibility under PERS, if such withdrawal would reduce the Tier Two benefit to which Husband would otherwise be entitled under this section. Wife is awarded as her separate property, free from any interest or claim by Husband, the remainder of her Tier Two Program benefits.

X.4 PERS administrative fees associated with the transfer and assignment of ORS Ch. 238 and 238A retirement benefits due to divorce will be allocated on a pro rata basis between the parties. (** Proration required under ORS Ch 238 & 238A) X.5 _______ shall retain an attorney to prepare the DROs that will assign benefits as set forth in this Section X. Such DROs shall be subject to Wife’s approval as to form. Wife shall reimburse Husband for fifty percent (50%) of his DRO attorney fees, for which he shall account to Wife; however, Wife shall not be required to reimburse Husband in an amount that exceeds $________ (as Wife’s share). Wife shall have 30 days after receipt of Husband’s request for reimbursement (and accounting) to tender payment.


Retired PERS Members

• Does Member have any IAP benefits left? Frequently not, having been rolled into IRA(s) or other investment vehicles

• HYPOTHETICAL #7-A: P chose the Tier One/Tier Two Program Option 2A at retirement (100% Jt & surv benefit; w/spouse, w/ Option 1 pop-up due to divorce or death); AP wants 50% of gross, monthly benefit during parties’ joint lifetime (AP pays taxes on AP’s distributive share); if P dies first, then AP gets continuation of AP award and P can designate a bene for his portion or in absence of designation, to P’s estate (survivor benefit distributions will completely terminate upon the death of last surviving spouse); if AP dies first, then PERS continues to distribute her portion to her designated beneficiary. In this scenario, each party must file a beneficiary election/designation form with PERS; DRO attorneys can assist, but parties must be warned (CYA letter!!). GJ/MSA must resolve the Option 1 pop-up (from Option 2A) issue; if it is silent, member can pop up; also if the issue of M’s right to change survivor beneficiary due to divorce is not raised in the GJ, then presumably it a lost issue and cannot be later added into the DRO.

• HYPOTHETICAL #7-B: Same as Hypo 7-A, above, except that survivor will take all upon the death of the first spouse (this approach is often seen as a desirable option in a long-term marriage). A party can propose this ‘survivor takes all’ approach as to any defined benefit plan where the retiree has elected (or can later elect) a joint and survivor benefit with a greater-than (>) 50% survivor benefit. Also see The Sopranos Hypothetical,

below. • Make sure to address pop-up (“Member shall not pop-up to Option 1 during

AP’s lifetime” – because pop-up / post-divorce benefit conversion hurts AP if s/he survives Member).

• Make sure to address whether Member may change survivor beneficiary due to divorce; applies if Member selected Option 2, 2A, 3 or 3A and named AP as her joint and survivor beneficiary (example: “Member is prohibited from changing her survivor beneficiary due to divorce”);

• Make sure to address Gap Months (months between MSA/GJ and date on which PERS begins making direct distributions to AP under the DRO). PERS cannot begin AP distributions until PERS ‘qualifies’ and begins administering the DRO (including getting PERS accounting unit on board). Though PERS Divorce Unit gives administrative priority to DROs concerning retired members, many months can pass between the marital property disposition date or date of divorce, and date on which PERS begins direct distributions to AP.


• EXAMPLE OF GEN JMNT ADDRESSING DISPOSITION OF RETIREE’S OPTION 2 / 2A Oregon PERS BENEFIT: ¨Disposition of ORS Chapter

238 Benefits: Husband participates in the Oregon PERS Tier One Program as a retired Member. Upon retirement, he elected Benefit Option 2 (100% joint and survivor benefit) and designated Wife as his joint and survivor beneficiary. Pursuant to a domestic relations order (DRO) to be filed simultaneously with or as soon as practicable following the entry of this General Judgment, Wife shall be assigned as Alternate Payee an amount equal to 50% of Husband’s gross, monthly PERS benefit, according to the reduction method of accounting (Alternate Payee pays taxes on Alternate Payee’s distributions), beginning on a date that is as soon as administratively feasible following the entry of the divorce judgment. Wife shall be entitled to a proportionate share of cost-of-living adjustments when and as paid by PERS. Each party shall have the right to designate a remainder beneficiary(ies)(including primary or contingent beneficiaries) for his or her respective portion of the PERS benefit, so that if Wife predeceases Husband, then her portion shall be paid to her designated beneficiary (or to her estate if no beneficiary is designated or survives); and if Husband predeceases Wife, then Wife’s assignment shall continue to be paid from the monthly survivorship benefit, for the duration of her lifetime, and the balance of the survivor benefit that is not awarded to Wife shall be paid to such beneficiary(ies) (including primary or contingent beneficiaries) as Husband shall hereafter designate. Husband shall not be entitled to change his form of benefit due to divorce, nor to change his survivor beneficiary (except that he may designate a beneficiary to receive his portion in the event that he predeceases Wife). Gap Months. Until PERS commences direct distributions to Wife pursuant to the DRO, Husband shall pay Wife a monthly sum of equal to 50% of his net monthly PERS Option 2 distribution. He shall not change his withholdings vis a vis PERS until PERS approves and administers the DRO. He shall transfer such funds to Wife by mailing a personal check, cashier’s check or money order, payable to Jane Doe (or such other name as the court restores to her under this or any subsequent judgment), to her last known address, via first class U.S. mail (or if Wife requests and provides sufficient information, then via direct deposit to her designated bank account), within 5 business days of Husband’s receipt of his monthly PERS distribution. These interim, gap-month transfers are not in the nature of spousal support and neither includable in nor deductible from a party's gross income.


VII. GARDEN VARIETY DIVORCES (DBPs, DCPs): POTENTIAL DRAFTING APPROACHES & HYPOTHETICAL

HYPOTHETICAL #8: THE SOPRANOS: Marriage of Soprano & Soprano

• 37-year marriage, 1980 (DOM) • Toni & Carmella separated in Dec 2016 (DOS) • Tony has 5 years of premarital service in Union Plan A (DBP 1) & no QDRO

has been received by DBP 1 concerning the prior marriage; prior spouse died mysteriously.

o Union Plan A (“DBP 1”) benefit is currently in payout status under a 50% jt & survivor benefit with Carmella

o Gross monthly benefit is $3,600 o According to Plan rules, Tony can pop-up to a single life annuity due

to divorce (and therefore boost his monthly benefit to $4,000) o DBP 1 does not have a 100% jt & surv benefit option o Address premarital service time vs married service time o Tony was inactive in DBP 1 since 2000 (he had 26 yrs of service, 21 of

which was accrued during the marriage) • Tony switched employers / unions in 2000

o Union Plan B (“DBP 2”) – he is an inactive, non-retired P o Accrued creditable service from Dec 2000 through Dec 2015 o Estimated monthly benefit at normal rtmnt age (65 yrs) is

$5,000 for single life, $4,500 for 50% jt & survivor benefit or $4,250 for 100% jt & surv

o Eligible for normal retirement at age 65 or early rtmnt (w/ reduced benefit) now

o Bells and whistles plan: 13th month payments, guaranteed COLAs, J&S options 50% , 75% or 100% Jt & Surv benefit

o 401(k) Plan balance of $500,000 • Carmella – no premarital retirement interests; homemaker

o She has $300,000 in Traditional IRA, all marital; no contributions since DOS

o Equalize 401k and IRA via one DRO? or use two DROs, each assigning 50%?

• C’s Plan A proposal:


• DCPs: She would keep 100% of her IRA, and get an (offset) assignment ($100,000) from T’s 401(k) that equalizes the IRA & 401k.

• DBP 1: C gets 50% (or lesser % based on Tony’s pre-marital service) of monthly benefit during parties’ joint lifetime, and 100% of the ‘50% survivor (remainder) benefit’ if he predeceases her (hint: she’s already entitled to the entire survivor benefit under the retirement contract). C’s award to include pro rata share of supplemental payments, subsidies, COLAs, and like adjustments, if any; if she predeceases Toni, he is allowed to convert to single life benefit if permitted by the Plan; otherwise, GJ needs to prohibit him from changing jt & survivor beneficiary, or changing the current form or type of benefit during parties’ joint lifetime.

• DBP 2: C wants 50% of monthly benefit during parties’ joint lifetime; she wants T to be ordered to select a 100% joint and survivor benefit and designate C as the joint and survivor annuitant. Tony is in poor health & under jurisdiction of the federal witness protection program. C is certain he is on death’s door and she’s willing to give now in order to get later, so she may accept less than 50% of the joint lifetime benefit, if it means 100% of the 100% Jt & Surv benefit option. Tony wants her to accept 25% of the joint lifetime benefit in exchange for 100% Jt & Surv; if not, then he insists that the GJ should provide that if he predeceases C, then his 50% share of the remainder benefit will be distributed to the beneficiary(ies) that he designates for that purpose, until C’s (the survivor’s) death. Does the Plan permit this ‘further assignment of a survivor benefit’ if ordered by a court? C’s award should include pro rata share of supplemental payments, subsidies, COLAs, and similar adjustments. C should also be awarded 100% of any PRSA/pre-retirement survivor benefit if T should predecease her before benefits commence. If the joint & survivor benefit scheme cannot be resolved, then a party could pursue and the court could a separate interest

award to Carmella of 50% of T’s accrued benefit determined as of his normal retirement eligibility date. But the 100% Jt & Surv benefit would yield her a far greater benefit over her lifetime, assuming she outlives Tony.

• Court to maintain jurisdiction over parties, retirement assets until all assignments contemplated under this section are complete.

• C will want to retain DRO counsel, have control over forms of DROs. T should contribute 50% of the costs of each DRO, up to $400 for each DCP


order and up to $500 for each DBP order. He is solely liable for his own DRO attorney fees, should he seek independent DRO counsel.

FERS, TSP

Federal employee or federal retiree Most likely FERS (CSRS phased out, so mostly elderly retirees at this point) TSP (Thrift Savings Plan): basic defined contribution plan (except AP cannot keep AP’s benefit in TSP; must take distribution or rollover within 60 days of approval of filed DRO; watch out for loan balances, pre-marital portions; 10% early w/drawl penalty? FERS/CSRS: Options at retirement for married federal retiree: self-only annuity, or a spouse or former spouse survivor annuity (FSSA) of 50% or 25%. FSSA cost is a reduction in retiree’s self-only annuity; 10% reduction for 50% FSSA, 5% reduction for 25% FSSA. DRO can carve out an FSSA award equal to FS’s shared interest award (?).

HYPOTHETICAL #9: FERS Retiree elected 50% spousal survivor annuity coverage upon retirement; in the divorce matter, AP will receive 50% of Retiree’s annuity during the parties’ joint lifetime. Points to consider:

• Separate benefit awards to AP ARE NOT available under FERS/CSRS. • AP award will be distributed by OPM like a garnishment when OPM

administers the DRO (can take 6 months to a year from the time the COAP is presented to OPM so if you have a retiree situation, AP wants GJ to provide for gap month payments through the time when OPM begins withholding from Retiree’s retirement pay; but once they begin withholding from Retiree’s pay, it can take several more months for OPM to begin distributions to AP. This can be a mess! Distributions cannot be taxable to AP until they are direct distributions from OPM; so gap month payments are made directly by retiree to former spouse, based on after-tax amounts (all is taxable to retiree per OPM’s 1099).

• Distributions to AP terminate upon death of P, unless FSSA coverage is provided for in first order addressing property distribution – eg., General Jmnt.

• First Order Rule: in divorce/legal separation involving retired FERS or CSRS member: 5 CFR 838.1004 (Qualifying Court Orders), Sub-section (e)(1) For purposes of awarding, increasing, reducing, or eliminating a former spouse survivor annuity, or explaining, interpreting, or clarifying a court order that


awards, increases, reduces or eliminates a former spouse annuity, the court order must be –

(i) Issued on a day prior to the date of retirement or date of death of the employee; or

(ii) The first order dividing the marital property of the retiree and former spouse( *** this means the divorce judgment, not the COAP)

(e) (2) In paragraph (e)(1) above, “date of retirement” means the later of:

(i) The date that employee files an application for retirement; or

(ii) The effective commencing date for employee's annuity.

• A modification in a court order is not effective to the extent that it involves a former spouse survivor annuity if the modification is made after the retirement or death of the employee.

• What about voluntary election form? The following points are applicable to Retiree and Non-Retired Scenarios alike: Address Resolve all of the following issues in your MSA/GJ/Trial Memo: - Monthly Annuity: AP gets dollar amount, formula amount, percentage, or “pro

rata share” (term of art under CFR) from retiree’s self only annuity or gross annuity. State which one it is.

- Employee Contributions Account (including withdrawals, and disposition of account balance, if any, at death of Federal Employee)

- FSSA: "Former spouse survivor annuity" means a recurring benefit that is payable after the employee's or retiree's death to a former spouse who has not remarried before becoming 55 years of age.” You should address how to allocate cost of FSSA; however, if the GJ and COAP are silent on that issue, default CFRs determine the cost allocation.

- Basic employee death benefit: “A court order that awards a FERS survivor annuity also awards a corresponding share of the basic employee death benefit unless the order expressly provides otherwise” https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c074.pdf

- BONUS ISSUE: Continuation of Federal Employee Health Benefits for Non-Employee Spouse. Don’t miss this issue, or your client could miss a narrow window of opportunity and lose access to healthcare benefits due to divorce. Try this: “To the extent that the conditions set forth under Section 8905(c) of Title 5, United States Code of Federal Regulations (“USC”) and Part 890 (Subpart H) of USC are satisfied,


Wife shall have the right to enroll in and access healthcare coverage through a health benefits plan under the Federal Employee Healthcare Benefits program (“FEHB”). Pursuant to Federal law, Wife must apply for such enrollment /

coverage within 60 days after the date of dissolution of marriage, by following the procedure established by OPM for completion and submission of Wife’s enrollment application in an approved health benefits plan described under section 8903 or 8903(a) of Title 5 USC as an individual, subject to her agreement to pay the full subscription charge of enrollment. It is not anticipated that Wife’s enrollment will be (financially) subsidized by OPM/FEHB and to the extent that it is not, such coverage shall be at Wife’s sole expense.”

FERS Scenario #2: Non-Retired FERS Member

• FSSA award does not have to be comprehensively set forth in first order / divorce judgment but in order to secure the FSSA for AP and avoid objections to the form of COAP if it includes an FSSA award, the divorce jmnt must lay the foundation for the FSSA to be included in the COAP

• Determine whether all creditable FERS/CSRS service is marital • Decide whether to express AP award as a formula (true or frozen coverture), a

pro rata share, a percentage, or (rarely) a dollar figure (which is turns out like a frozen coverture as applied near the time of divorce; amount is usually derived from current estimation of benefit calculation generated by OPM in anticipation of divorce and used in discovery or trial).

• Although a FE may be eligible to presently receive FERS retirement benefits, the FE could elect to defer distribution beyond initial eligibility if, for example FE continues federal employment beyond initial retirement eligibility; the AP cannot collect anything until FE commences benefits.

VIII. TO RESERVE JURISDICTION OR NOT? When the disposition of a retirement benefit in the GJ is ambiguous and the parties subsequently cannot agree on a form of (Q)DRO, court intervention will be sought. There are limited ways to approach this, and (Q)DRO attorneys and general divorce counsel will look to the GJ for guidance on this. The following sample language can be useful for getting the issue before the court. However, OSB ethics counsel cautions us to “avoid ‘retaining jurisdiction’ language. It is meaningless and causes confusion. The jurisdiction of Oregon courts is set by statute. The court either has jurisdiction to decide a post-judgment motion, or it doesn’t.”


SAMPLE LANGUAGE, WHICH MAY BE HELPFUL BUT CONFUSING AND ULTIMATELY MEANINGLESS: The Cout retains jurisdiction over the retirement benefits identified in this section, in order that it may enter such orders as are necessary to clarify this judgment in order to accomplish the goals expressed herein. The Court retains jurisdiction over the parties and over ________’s retirement benefits until a domestic relations order acceptable for administration by the retirement Plan administrator is presented to and administered by the Plan. The Court retains jurisdiction over the parties and the parties’ respective interests in the retirement plans described above, to effect the assignment and transfer of retirement assets as described in this Section XX. The Court retains jurisdiction over the division of Husband’s retirement benefits so that it can enter necessary (Q)DRO(s) and make clarifications to this judgment that may be necessary to conform to the retirement plan terms and procedures and to fulfill the goals stated herein related to division of retirement benefit(s).

(1)

(a)

(b)

(2)

(3)

(a)

(b)

(c)

(d)

(e)

(4)

(5)

(b)

(6)

A court that entered a judgment of marital annulment, dissolution or separation shall reopen

the case upon the motion of either party if the moving party alleges that significant assets

belonging to either or both of the parties:

Existed at the time of the entry of the judgment; and

Were not discovered until after the entry of the judgment.

If the court finds that the assets were inadvertently omitted from the distribution of the

marital estate, the court shall make such distribution of the omitted assets as is just and

proper in all the circumstances.

If the court finds that the assets were intentionally concealed and thereby not included in

the distribution of the marital estate, the court may order:

The division of the appreciated value of the omitted assets;

The forfeiture of the omitted assets to the injured party;

A compensatory judgment in favor of the injured party;

A judgment in favor of the injured party as punitive damages; or

Any other distribution as may be just and proper in all the circumstances.

The court may award attorney fees on any motion filed pursuant to this section. The court

shall award attorney fees to the moving party if the court finds that assets were

intentionally concealed and thereby not included in the distribution of the marital estate.

(a) A motion alleging inadvertent omission of assets must be filed within two years after the

date of discovery of the omission but no later than three years after the entry of the

judgment.

A motion alleging intentional concealment of assets must be filed within two years after

the date of discovery of the omission but no later than 10 years after the entry of the

judgment.

A motion under this section may be filed with and decided by the trial court during the time

an appeal from a judgment is pending before an appellate court. The moving party shall

serve a copy of the motion on the appellate court. The moving party shall file a copy of the

trial court’s order in the appellate court within seven days after the date of the trial court

order. Any necessary modification of the appeal required by the trial court order shall be

pursuant to rule of the appellate court. [1995 c.800 §6]

1 Legislative Counsel Committee, CHAPTER 107—Marital Dissolution, Annulment and

Separation; Mediation and Conciliation Services; Family Abuse Prevention, https://www.-

oregonlegislature.gov/bills_laws/ors/ors107.html (2015) (last accessed Jul. 16, 2016).

OregonLaws.org, a WebLaws.org site

RELIEF FROM JUDGMENT ORCP RULE 71—Relief from Judgment or Order

A Clerical mistakes. Clerical mistakes in judgments, orders, or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time on its own motion or on the motion of any party and after such notice to all parties who have appeared, if any, as the court orders. During the pendency of an appeal, a judgment may be corrected as provided in subsection (2) of section B of this rule. B Mistakes; inadvertence; excusable neglect; newly discovered evidence, etc. B(1) By motion. On motion and upon such terms as are just, the court may relieve a party or such party's legal representative from a judgment for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 64 F; (c) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment is void; or (e) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application. A motion for reasons (a), (b), and (c) shall be accompanied by a pleading or motion under Rule 21 A which contains an assertion of a claim or defense. The motion shall be made within a reasonable time, and for reasons (a), (b), and (c) not more than one year after receipt of notice by the moving party of the judgment. A copy of a motion filed within one year after the entry of the judgment shall be served on all parties as provided in Rule 9 B, and all other motions filed under this rule shall be served as provided in Rule 7. A motion under this section does not affect the finality of a judgment or suspend its operation. B(2) When appeal pending. A motion under sections A or B may be filed with and decided by the trial court during the time an appeal from a judgment is pending before an appellate court. The moving party shall serve a copy of the motion on the appellate court. The moving party shall file a copy of the trial court's order in the appellate court within seven days of the date of the trial court order. Any necessary modification of the appeal required by the court order shall be pursuant to rule of the appellate court. C Relief from judgment by other means. This rule does not limit the inherent power of a court to modify a judgment within a reasonable time, or the power of a court to entertain an independent action to relieve a party from a judgment, or the power of a court to grant relief to a defendant under Rule 7 D(6)(f), or the power of a court to set aside a judgment for fraud upon the court. D Writs and bills abolished. Writs of coram nobis, coram vobis, audita querela, bills of review, and bills in the nature of a bill of review are abolished, and the procedure for obtaining any relief from a judgment shall be by motion or by an independent action. [CCP 12/13/80; §§A,B(2) amended by CCP 12/10/88 and 1/6/89; §B amended by CCP 12/11/10]

PLF’s General Malpractice Prevention Tips for Divorce Attorneys Handling Retirement Benefits in Property Awards:

Guidance & Q/A from PLF Attorneys Sharnel Mesirow & Patricia Nation:

1. Talk to a QDRO attorney first. Sometimes the language of the judgment does not comply with the requisite language for a proper (Q)DRO to be drawn. Attorneys should speak to a (Q)DRO attorney before submitting a final judgment. Even if the attorney has obtained the paperwork from, for example, PERS, it is still best to have a (Q)DRO attorney review it before final judgment is entered.

a. At one time, some pension plans simply required forms to be filled out, and thus, some

attorneys saw no need for a (Q)DRO attorney. It is best to let an expert make that determination.

2. Be clear on the scope of representation both at the beginning and end of the representation. Do it

in writing! In most (Q)DRO problems that PLF handles, claimants allege their divorce attorney failed to draft the (Q)DRO. If the family attorney does not intend to draft the (Q)DRO, she/he should tell the client that at the initial meeting and repeat the message (in writing) throughout the divorce.

a. Retainer agreements should outline what work the attorney will do and will not do (scope of

representation). b. Send a closing letter! Attorneys should withdraw when the agreed upon representation is

completed. They should send a letter to their clients outlining what else needs to be done (e.g., (Q)DRO, real estate conveyance deed, change beneficiary designations...) and tell their clients (now former-clients) they need to retain a (Q)DRO attorney to assist with the retirement benefit division. It is always better if the withdrawing attorney also suggests three or four (Q)DRO attorneys or at least indicates how to find such an attorney or offers to provide referrals upon request.

3. Use clear language in the GJ regarding effective dates (or, benefit measurement dates) for the

(Q)DRO. The PLF encounters situations wherein the GJ does not address the ‘cut-off’ date(s) (eg., ‘valuation date,’ ‘effective division date’ or ‘determination date’). If there are pre-marital balances or anticipated post-date-of-divorce accruals, clearly address the disposition of those.

4. Be diligent in conducting discovery. PLF had a case where wife’s attorney knew how much was

in the 401(k) when the dissolution matter began, but failed to ascertain the balance at the time of the division of property. The amount had dropped. Therefore, an attorney should verify the amount before submitting the GJ to the court and look to update the figures when a period of time has passed.

a. Another problem occurs when the attorney does not realize the pensioned spouse has more than one pension. Be sure the discovery request is clear. Another option may be for family lawyers to start incorporating requests for admissions, so the opposing party has the burden of affirming the existence/disclosure of all retirement/investment assets.

5. Verify retirement benefits. Some pension plans do not permit early withdrawal. Therefore, an

attorney should ascertain whether the beneficiary spouse will be able to obtain a lump sum from the pension or will have to wait until the former spouse retires to receive any money.

6. Verify the method payment is received/accrued by the participant-spouse. That is, the judgment

was drafted such that the cut-off date also cut-off interest accumulating. For account-based benefits, the alternate payee spouse would like his/her portion to continue to accrue interest.

Frequently, a party will wait anywhere from months to many years (even decades) after the GJ is entered, to seek entry of a (Q)DRO; often, what prompts this that a party’s own retirement plan refuses to process a retiree’s retirement application and distribute benefits to the retiree unless/until it receives a ‘free & clear’-type order or a (Q)DRO).

What malpractice issues arise for an attorney who represented “Party A” in his/her divorce, and either prepared the GJ or approved it as to form (or failed to object to its treatment of retirement benefits), and one or more of the following conditions arise:

A. GJ was filed and the appeal time has run and maybe the omitted asset statute of limitation

has run (but maybe not); or, GJ either omitted a retirement benefit interest or articulated an impossible disposition of it. PLF: An appeal would be unlikely to resolve the division of property. However, if asset was omitted and the attorney should have known about the asset, he/she may have committed malpractice. Of course, the aggrieved party will have to show that the former spouse would have agreed to whatever the aggrieved party believes should have happened. Although PLF would likely retain an attorney to look at this to see if there is malpractice and a solution, if the pensioned spouse has now retired, then ERISA may come into play.

B. Party A cannot get Party B’s approval or stipulation to the form of (Q)DRO. PLF: The best

course of action would be to make a motion to show cause, and have a judge require the cooperation of both parties. Better yet, the language of the GJ could require judicial decision if the parties cannot agree on the language of the judgment or the division.

C. The retirement plan will not distribute participant’s retirement benefits even to participant until a QDRO is entered. PLF: This is not necessarily malpractice. However, it would be incumbent upon attorneys to encourage their clients to agree to the division of assets. If this is not possible, then an enforcement action would be initiated by the aggrieved party. Whichever party is aggrieved can take it up with the court.

D. Party A has tendered the proposed QDRO to the court but party B has objected or for some

other reason, the court denies Party A the relief h/she sought (perhaps it did not permit a QDRO to be entered at all [unlikely?] or it enters a QDRO that varies substantially from Party A’s proposed QDRO), to the financial detriment of Party A). PLF: Failure of a party to stipulate is not malpractice. Parties often disagree, hence all of the litigation in America. That does not mean there was negligence on the part of an attorney. And as stated above, the attorney may have the defense the adverse party would never have agreed to whatever it is the aggrieved party is arguing.

E. In a lawsuit against Party A’s divorce lawyer, Party A can prove the difference in value

btwn what it would have received under its proposed form of QDRO, and what it did receive as a result of the court’s decision (assume that it is HUGE sum of money). PLF: There may be liability if Party A will can show her/his attorney’s negligence caused the court to rule against the claimant’s QDRO version.

F. Had the divorce lawyer either known of the retirement benefit, which was easily

discoverable by lawyer, or had the lawyer understood the nature of the asset, then a just and proper disposition of the property interest could have been achieved under the GJ. PLF: The question posed is not easy to answer. If the attorney failed to discover an asset that is not mentioned in the General Judgment, then it may be possible to make a motion to the court to address the omitted asset. If the asset was omitted only as a unilateral mistake, the client still has an obligation to attempt to mitigate the damages by trying to seek the opposing party’s cooperation in stipulating to a QDRO vis a vis a corrected judgment. The PLF would certainly assist the attorney to set aside or correct the judgment. If the adverse party will not agree to correct the problem, the PLF would retain an attorney to advise us if court involvement would be beneficial. There are times when attorney conduct in this context has fallen so far below the standard of care (ie. failure to seek advice from a QDRO attorney, failure to recognize the nature of the retirement asset, or failure to employ specific language to effectuate the distribution as intended by the Court or stipulated by the parties) that the attorney is liable for malpractice. If liability is likely, then PLF would have to value the retirement asset in question and pay the client the difference between what the client should have received, and what the client actually received. In this case, the best advise for practitioners is to have sufficient PLF coverage (and EXCESS coverage beyond the $300,000 primary limit) in place.

Condensed List of Considerations in Drafting General Judgment Language Concerning Account-based Plan Awards

Account-based Plans (i.e., 401(k), 403(b), profit sharing, IRA)

Recite actual, registered name of retirement plan(s) (e.g., “Wife participates in the ACME 401(k) Plan” as opposed to “Wife’s 401(k) account with her current employer”)

Recite specific dollar amount or specific percentage amount to be awarded and assigned to non-participant spouse

What is the date the amount is assigned (e.g., date of divorce) Specify whether award is adjusted for post-assignment date account performance (consider

whether accounts are daily valued, quarterly valued, annually valued, as gains/losses will only be reflected as of the most recent valuation date)

Consider whether AP receives a share of any employer contributions (profit sharing, matching) attributable to P’s compensation in the current plan year, since employers often don’t make these contributions—or even decide if they’re going to make them—until well after the plan year end (8 months)

Consider whether the participant’s account has been credited with allocations of employer contributions attributable to P’s compensation in the prior plan year

Find out if the plan is required to make profit sharing or matching contributions for the current year (e.g., safe harbor contributions), and if so draft accordingly

Are several tax deferred account-based retirement benefits being divided (e.g., list above plus IRA’s, SEPs), and if so are the parties willing to aggregate all and divide a single one to equalize the total (if so, consider the next two bullets and how they may affect the equalization)

If IRAs are being divided, find out if you’ll need a QDRO (usually not), and keep in mind AP can’t take penalty-free, pre-age 59.5 withdrawals from an IRA like AP can from other qualified retirement plans

Could the account include Roth contributions, and, if so, does the AP share pro rata in them Could the account include a participant loan receivable, and if so is it included in determining any

percentage division, and might it be so large it prevents the plan from transferring APs share to AP—state whether AP’s award will include or exclude outstanding participant loans. Inclusion of loan balance will increase amount of AP’s award, while exclusion will decrease AP award. Either way, the court cannot assign liability for loan repayment to AP (other than in a round-about way using loan exclusion)

If AP dies before AP’s account is created, and perhaps before the order is qualified, should the plan continue with the assignment

Indicate if AP is treated as the death beneficiary for the amount of AP’s award pending creation of AP’s separate account

If you have or can get an idea how long the plan(s) will take to fully process, qualify, and make distributions with respect to the QDRO, add about 2 months and let your client know—the process takes longer than most people think and realistic expectations can save a lot of grief

If the plan pays benefits to the wrong person what happens

QDROs and PARTICIPANT LOANS

(Applicable to awards from defined contribution plans) A well-drafted QDRO for a defined contribution retirement plan, such as a 401(k) plan (and the dissolution judgment that provides the basis for the QDRO), should address and resolve the issue of Participant loan balances outstanding (i.e., unpaid) as of the specified account division date. Keep in mind that many defined contribution plans consider a Plan Participant’s outstanding loan balance as a Plan asset, with the loan balance being Included as part of the Participant’s total account balance as shown on Plan records. If there is an outstanding loan balance and the Alternate Payee is going to be awarded a percentage of the Participant’s account (as distinguished from a specified dollar amount), it is important to specify whether the loan balance is to be INCLUDED or EXCLUDED when calculating the Participant’s total account balance. Example:

• Participant’s non-loan account balance on the valuation date: $100,000

• Participant’s loan balance on valuation date: $ 10,000 Total account value (if loan balance is included): $110,000

• Alternate Payee’s award, if defined in QDRO as 50% of the Participant’s vested account value EXCLUDING loan balance: $ 50,000

• Alternate Payee’s award, if defined in QDRO as 50% of the Participant’s vested account value INCLUDING loan balance: $ 55,000 NOTES: 1. If the determination of the Participant’s account value Includes outstanding loan balances, the actual award payable to the Alternate Payee will nonetheless be paid (funded) exclusively from the Participant’s non-loan account assets. 2. Participant loan assets are not assignable to an Alternate Payee (even if a QDRO so directs.) Liability for any remaining loan balance at the time of segregation of the award will remain the liability of the Participant. 3. The Participant’s non-loan account balance must be equal to or greater than the amount awarded to the Alternate Payee by the terms of the QDRO. If otherwise, the QDRO will either be rejected by the Plan as non-qualified or will be interpreted by the Plan as applying only to the non-loan assets In the Participant’s account. Prepared by: LAWRENCE D. GORIN Attorney at Law / (503) 718-8756 / [email protected]

Condensed List of Considerations in Drafting QDROs for Formula-based Plans (i.e., traditional defined benefit plan, cash balance plan)

Is it worth obtaining a present value of P’s benefit to permit assigning the entire benefit to P in exchange for an

asset of equal value Does AP receive a segregated benefit based on AP’s life (separate interest); or, alternatively, a share of P’s

benefit payments when and as made (based on P’s life) and post-retirement survivor annuity benefit (shared interest)

If AP receives a shared interest, must P elect to receive P’s benefit in the form of a 50% joint and survivor annuity

If AP receives a shared interest, is P required to retire and commence benefits no later than a certain date If AP receives a separate interest, does AP receive a share of the frozen benefit as of a set date (e.g., date of

divorce), or a share of the true benefit as of the date the benefit goes to pay status If AP receives a separate interest is the marital share determined using the “time rule” marital fraction, or some

other agreed fractional share of P’s benefit If AP receives a separate interest may AP take AP’s share at any time permitted by the plan (generally age 55),

subject to reductions for early retirement adjustments; and what if P later receives an enhanced benefit (e.g., early retirement benefit)

Is P required to make reasonable efforts to qualify for enhanced benefits under special plan rules (e.g., rule of 65/72/80/85; 70/80 eligibility)

Does the plan provide a secondary death benefit in addition to the pre-and/or post-retirement survivor annuity benefit, and if so does AP get any part of it

Does AP receive a proportionate share of any benefit enhancement (e.g., early retirement, thirteenth month checks)

Does AP receive a proportionate share of any COLA or COLA-like benefit increase If AP dies before either party initiates benefits does APs share get paid to contingent beneficiaries (if permitted

by the plan), does it revert to P, or does it get absorbed by the plan Does AP receive assignment of share of any pre-retirement survivor benefit If AP’s benefit is protected by assignment of the pre-retirement survivor annuity prior to benefit

commencement—and it generally should be, does AP receive some or all of the benefit (or does AP’s share depend on whether P is married at the time of death)

If AP’s share of the pre-retirement survivor annuity is limited to the “marital share” is the marital share equal to or double the marital “time-rule” fraction

Consider how the AP’s failure to waive the pre-retirement survivor annuity, and how protection of AP’s interest with a pre-and/or post survivor annuity benefit affect the value of P’s benefit, and who should pick up the “cost” of these AP benefits and how

Will AP irrevocably waive AP’s right to the pre-retirement survivor annuity If AP predeceases P, and P dies before benefits commence, do death benefits get paid to P’s beneficiary or AP’s

contingent beneficiaries (if permitted by the plan) If AP dies before AP’s separate interest is established, and perhaps before the order is qualified, should the plan

continue processing the division If the plan pays benefits to the wrong person what happens Condensed list of Considerations in drafting DBP QDROs By B. Kevin Burgess

Righting the Divorce Judgment:Creating a Solid Foundation for the (Q)DRO

and Avoiding Malpractice Claims

Glossary of Abbreviations:AP – Alternate Payee (eg., non-employee/non-member spouse)COLAs – Cost of Living AdjustmentsDBP – Defined Benefit PlanDCP – Defined Contribution PlanDOD – Date of Divorce DOM – Date of Marriage DOS – Date of Separation FSSA – Former Spouse Survivor Annuity GJ – General JudgmentM – MemberMSA – Marital Settlement AgreementP – Participant (eg., member, employee-spouse)(Q)DRO – (Qualified) Domestic Relations Order(Q)PRSA – (Qualified) Pre-retirement Survivor Annuity

RETIREMENT BENEFIT DISPOSITION LANGUAGE IN YOUR GJSHOULD RESOLVE ALL SUBSTANTIVE ISSUES & SERVE AS ARELIABLE ROADMAP FOR THE (Q)DRO.

CLE OBJECTIVE: IDENTIFY & RESOLVE SUBSTANTIVERETIREMENT BENEFIT ISSUES IN YOUR CASE BEFORE GJ ISENTERED, TO ENSURE THAT IT PROVIDES ADEQUATEFOUNDATION FOR SUBSEQUENT DRO(S).

MOST COMMON SHORT-COMINGS IN GJs:

• Failure to identify retirement plan(s) by name (omission or misnomer)• Silence re: asset or critical, substantive issue(s) (omission, incomplete ppty disposition)* Using the term “marital portion” w/out defining or specifying mechanism to define • Impossibility: awarding inapplicable / unavailable relief (applying account-based

language to DBP)

- Most frequent and potentially most devastating error: awarding AP a percentage or dollar amount from a non-retired Oregon PERS member’s Tier Program “account.” More about this later.

• Ordering unenforceable, unethical or impractical schemes (eg., awarding an unassignable interest; requiring JT selection or JT retainer of DRO counsel; unworkable or unrealistic atty fee reimbursement)

WHAT SHOULD YOU DO?

PROFESSIONAL / ETHICAL CONSIDERATIONS #1

The unambiguous language in the Judgment dictates the rights and interests of the parties in the retirement plan benefits at issue and the QDRO may not deviate from or otherwise modify those rights and interests. Tough v. Tough, 259 Or App 265, 313 P3d 326 (2013) http://law.justia.com/cases/oregon/court-of-appeals/2013/a150941.html

The first ethical duty of a lawyer is to provide competent representation. RPC 1.1 What does competent representation

require in these circumstances? It requires planning and foresight.

• DROs will be prepared at the very end of the case. They can be done as part of the general judgment, but almost always they are handled by a supplemental judgment.

• Parties are exhausted, don’t want to spend any more money. Your job: to prepare your client for necessity of the QDRO expense and procedures; perhaps secure additional money in your trust account for the process. Discuss w/ opposing counsel ‘who will prepare the DRO’ and ‘how it will be paid for’?.

• The point of today’s presentation: get the GJ right the first time and avoid last minute DRO problems

• #1 Property awards are not modifiable. https://www.osbar.org/secured/barbooksapp/#/section?doc=fam12_sec_6-9-8

See pg. 45 of materials

• #2: ‘Omitted Asset’ Relief is Limited by Statute – APP-1ORS 107.452 https://www.oregonlaws.org/ors/107.452

• #3: Relief From Judgment is Limited by Statute – APP-2 ORCP Rule 71

• #4: Guidance from PLF – APP-3

STRATEGIES TO AVOID THE MOST COMMON ERRORS

Diligent Discovery Efforts – know what Plan & what TYPE of plan Sufficient lead time to get information you need from client, OP, the Plan Checklist Analysis – Address ALL substantive issues Consult w/ DRO attorney early and often (certainly before MSA / GJ) Create a solid, enforceable retirement distribution scheme

Defined Contribution Plans (DCPs)

- Review DCP Checklist - APP-4

COMMON TYPES OF ACCOUNT-BASED PLANS (DCPs)DEFINED CONTRIBUTIION PLANS (401k, 403b, 457b, 401a, IAP, TSP…)INDIVIDUAL RTMNT ACCOUNT (IRA)ESOP*

LOAN BALANCES: Exclude or Include?

MARITAL PORTION – Define (examples p. 6, 14)

Defined Benefit Plans (DBPs)

- Review DCP Checklist - APP-6

- Formula based plans:DEFINED BENEFIT PLANSCASH BALANCE PLANS

‘HYBRID’ PLANS (eg., Oregon PERS Tier Program)

How to express the DBP award?

** ‘True coverture/deferred interest fraction’, vs. ‘Frozen coverture/immediate offset fraction’

** Most if not all of the DBP drafting samples provided in the materials use ‘true coverture’

ARTICULATING AP’S PORTION OF DEFINED BENEFITCan use $$ or %%, but coverture-based formula (married time ratio) is the most common:

TWO WAYS TO SLICE THE PIE (See the late, great Larry Gorin’s chart, p 9 of materials)

1. FROZEN COVERTURE - aka accrued coverture or immediate offset fraction. Values /divides benefit at time of divorce. Generally favors P. AP award expressed as:

Dollar amount of P’s accrued benefit @ date X of divorce

# of months of marriage coinciding w/ P’s creditable service under Plan ___________________________________Total # of months of P’s creditable

service under Plan as of date of divorce

x 50%

2. TRUE COVERTURE (aka prospective coverture or deferred interest fraction). Values, divides benefit at time benefit moves to pay status. Generally favors AP. AP award is expressed as follows:

Dollar amount of P’s accrued benefit @ P’s benefit commencement date x


________________________________________Total # of months of P’s creditable service

under Plan as of P’s benefit commencement date or, if earlier, AP’s

bene commencement date

x 50%

DBP Retirees

• No separate interest award available to AP• Looks more like garnishment • AP pays taxes on AP’s assigned portion• Understand the form of benefit elected, including

survivor benefit (or lack thereof)

Does plan allow P to convert benefit from JT & survivor benefit to self-only benefit due-to-divorce (eg., higher monthly amount, benefit terminates upon P’s death)?

Does Plan allow P to change survivor beneficiary due to divorce?

These concepts apply in PERS OPSRP & Tier Program Retiree setting as well

DBP Retirees (cont’d)

• Should MSA/GJ prohibit P from doing either?• Will AP benefit revert to P if AP predeceases P? Or

will/can Plan distribute AP’s portion of monthly benefit to AP’s beneficiary (or AP’s estate) until P’s death? Does Plan even allow for that?

• If P predeceases AP, will some portion of survivor benefit (payable until AP’s death) be allocated to some other beneficiary designated by P after divorce? * not all plans allow this

• ‘Gap Months’ Issue• Special FERS/CSRS “FSSA” considerations & “First Order

Rule”

PROFESSIONAL STANDARDS OF CARE, ETHICS:

Confer with DRO counsel during discovery phase

Confer with DRO counsel before/during negotiations/proposals/MSA drafting

Confer with DRO counsel while drafting trial memo

Confer w/ DRO counsel before drafting/approving GJ

Use contingencies if necessary (if A, then B, but if not A, then C + D).

PROFESSIONAL STANDARDS OF CARE, ETHICS:

The elements of competence are legal knowledge, skill, thoroughness and preparation. Being thorough in these circumstances means educating yourself about the particular retirement plans involved in the case and the options available for dividing them. You can make that assessment yourself by reading the plan, but a better education can be derived by contacting your DRO lawyer early and often.

Contact DRO lawyer before trial, just as you would an appellate lawyer or any other trial experts, so that you can request appropriate relief for your client (claim preservation)

HYPOTHETICAL #1: Catch All (Catch Some)

Pages 12-13 of materials

• Only one party has retirement plan benefits• DCP & DBP disposition• Who retains DRO attorney, who pays & how• ‘Retention of Jurisdiction’ (ETHICS**)

Offsets & RelatedHYPOTHETICAL #2:

• Only one party has DCP benefits• Intends equal division of multiple DCPs• Addresses possible pre-marital DCP balances• Addresses loan balances• Leaves door open for stipulated equalizing QDRO, but also for multiple QDROs if

parties cannot agree • Lawyers are NOT financial investment advisors

Offsets & Related

HYPOTHETICAL #3: • Both spouses have DCP benefits (one more than the other)• All benefits were accumulated during the marriage• Equal division of multiple DCPs intended• Could do QDRO for each DCP, but may want to do an equalizing QDRO• Parties lack info/resolution as to which/how many Plans to QDRO-out• No participant loan balances• Leaves door open for stipulated equalizing QDRO, but also for multiple QDROs if

parties cannot agree • Lawyers are NOT financial investment advisors

Offsets & Related

HYPOTHETICAL #4:

• Spouses have resolved to liquidate a portion of a DCP account to pay marital debt AND to equally divide the remaining balance

• All benefits were accumulated during the marriage• Both spouses under age 59.5 (IRS will consider any distribution to be ’early distrib’)• Plan is a 401(k) or other Plan subject to special IRS rule about ‘exempt distribution’ so

that AP can take a distribution under a QDRO & avoid 10% penalty• Time is of essence to prepare the QDRO, because party(ies) servicing debt

OREGON PERS/OPSRP: POTENTIAL DRAFTING APPROACHES & HYPOTHETICALS (pp 16-

Issue #1: Tier One + IAP; Tier Two +IAP; or OPSRP DBP+ IAP?

Issue #2: Is Member Retired or Non-Retired?If non-retired (pp 16 – 23)If retired (pp 24– 25)

If Non-Retired:

1. IAP (DCP):

• No loans permitted• Valuation date must be 12/31 of prior year (exception)• Special Issue: whether, when & how to capture YTD

contributions• Drafting examples pg 17•

If Non-Retired:

2. OPSRP Pension Plan (DBP):

• No Account Balance• DBP – provides a life pension (annuity)• Member vested after 5 yrs of creditable service• AP gets shared interest until segregation (@ retirement)• Approach as you would a garden variety DBP• Award pre-retirement survivor benefit• Designed to provide approx. 45% of member’s final,

average salary at retirement• Pre-retirement survivor benefit available to spouse/FS

If Non-Retired:

3. Tier One or Tier Two (‘Hybrid’ Plan):

‘Hybrid plan’ with DCP and DBP features.

Key considerations:

* Separate Account Award for AP(w/ or w/out money match; 12/31 valuation; no pre-rtmnt survivor benefit award needed)(See pg. 19 – Hypothetical #5 – drafting example)

or,

* Shared Interest Award for AP(AP award can be converted to separate benefit based on AP’s lifetime, upon retirement &whether Member retires under Money Match of Full Formula; so best of both worlds)(See pg. 19 – 23, Hypothetical #6 – analysis & drafting example)

Tier One, Tier Two: How it works:

At Member’s retirement, PERS applies retirement benefit calculation that yields Member’shighest benefit; either:

(1) Money Match formula(account-based benefit calculation: Tier Member account balanceplus employer matching dollars)

or

(2) Full Formula method(frequently yields significantly higher benefit than Money Match; seeHypothetical #6, below).

Thus, AP needs to avoid separate Tier One / Tier Two accountaward unless AP is certain that Money Match will yield higherbenefit, or is willing to blindly risk that it won’t.

The risk is that AP will leave marriage with less — perhaps farless (and Member with far more) – than 50% of marital portion

PERS Tier One/Tier Two & IAP Pre-Retirement Guide(overview of retirement options available to PERS retirees)

(link / url @ pg. 18 in your materials)

http://www.oregonlive.com/politics/index.ssf/2011/12/mike_bellotti_former_universit.html

CONSIDER THE CASE OF U of O COACH BELLOTTI

HYPOTHETICAL #5 - “His and Hers PERS” (pg. 19 – 23):

DOM – June 1998DOD or Marital Property Settlement Disposition Date – 1 June 2016Husband:• Active, non-retired OPSRP Member• PERS IAP {DCP} acct balance is $145,000 on 12/31/2015• - YTD IAP contributions $3,500 as of 6/01/2016• OPSRP pension plan - H’s “cumulative retirement credit” under OPSRP pp = 11 yrs + 6 mo• OR Savings Growth Plan {OSGP} – 6/01/2016 balance $40,000Wife:• Active, non-retired PERS Tier Two Program & IAP Member • Tier 2 start date – 1/01/2003• Service time as of marital property disposition date: 13 yrs + 5 mo• PERS IAP acct balance is $125,000 on 12/31/2015• YTD IAP contributions as of DOD = $2,100 • Tier Two Member Account balance is $11,000 on 12/31/2015 • Wife’s current monthly salary - $7,000• Wife’s normal rtmnt date (@ age 60) is in 2034, w/ 30 yrs creditable service• Wife’s projected, final avg monthly salary @ retirement: $10,000

PERS Tier Two Hypothetical

‘EASY’ SPLIT ‘COMPLICATED(?)’ SPLITImmediate Account Split Deferred Interest, Marital Fraction(eg., separate account for AP) Reduction/Deduction

Bottom Line: Bottom Line:

Yields AP $319/mo Yields AP $1,120/mo Yields Member $4,691 Yields Member $3,890/mo

Best choice for AP only if Allows AP to share in Member’sMember retires under highest benefit calculation method Money Match (eg., MM as determined at retirement ANDyields highest benefit elect separate benefit option on or for Member after M’s earliest rtmnt eligibility date

‘EASY’ SPLIT ‘COMPLICATED(?)’ SPLITImmediate Account Split Deferred Interest, Marital Fraction

Reduction/Deduction

AP Award: “50% of M’s PERS Tier AP Award: “50% of marital portion of account ($5,500)+ interest + employer M’s Tier benefit per married time ratio:money match

$5,500 x [19 yr @ .075/yr*] = $21,733 # of months creditable service during marriage# of total months of cred. service @ retirement

Apply Money Match: $21,733 x 2 = $43,466

* avg APR btwn 2004-2015, projected to 2034

MEMBER’S FULL FORMULA, MONTHLY RETIREMENT BENEFIT

[Final average monthly salary] x [retirement credit] x [1.67%]

as applied:

[$10,000] x [30] x [.0167] = $5,010**

**Member’s Option 1 (self-only) w/out AP award offset

‘EASY’ SPLIT ‘COMPLICATED(?)’ SPLITImmediate Account Split Deferred Interest, Marital Fraction

Reduction/Deduction

AP’s Money Match: $21,733 x 2 = $43,466 AP’s award (50% of married time ratio)PERS to pay AP lump sum ($43,466) or applied to Full Formula benefit ($5,010):convert to monthly benefit using applicable annuity conversion factor (currently 7.34** #mo married service X 50% X $5,010for 60 y/o): #mo total PERS service

or: $43,466 x .00734 = $319.04 / mo 161 X 50% X $5,010 = $1,120.29 / mo ††

360

** See PERS Tier 1 & 2 / OPSRP Actuarial Equivalency Factors tables (available from PERS)†† This amount would vary depending upon AP’s age, given that it would be paid as a separate benefit based on AP’s lifetime (eg., an actuarial equivalent calculated on the basis of AP’s lifetime, to yield an Option 1 benefit for AP)

His & Hers PERS (Hypothetical #6 – General Judgment Drafting Example

** See pg. 21 – 23 of materials** the ‘Complicated Split’ is articulated on p. 23 & highlighted in yellow

RETIRED PERS TIER PROGRAM MEMBER

• Does Member have any IAP balance left?• What Option did Member elect at retirement?• Address BOTH:• - Allocation of monthly benefit during parties’ jt lifetime • (looks like a garnishment); and,• - Disposition of Benefit Upon Death of First Spouse: see •• HYPOTHETICAL 7-A (p.24) & drafting example (p.25) • allow predeceasing spouse to designate alternate,• contingent beneficiary for AP’s assigned share•• HYPOTHETICAL 7-B (p.24) AP takes all if M dies first; or, if

AP predeceases Member, then AP award reverts to Member)

• THE POP-UP• If Retired Member elected Option 2A, 3A, L2A or L3A, GJ must

address ‘Pop-up’ (can Member pop-up to Option 1 due to divorce? Or is Member prohibited from popping-up due to divorce? Can Member pop-up if AP predeceases M? Yes, unless AP is awarded the right to designate a contingent AP in the event that AP predeceases M)

• The Pop-up converts survivor benefit to a single-life / self-only benefit, and therefore increases the benefit payable during the parties’ joint lifetime; BUT the conversion terminates survivor benefit (so that if Member predeceases AP, there is nothing left to pay AP – unless there’s a residual Tier program account balance; but generally speaking acct bal is zeroed-out by about 5 yrs after retirement)

• CHANGING JT & SURVIVOR BENEFICIARY DUE TO DIVORCE

• Retired PERS Member elected AP as Member’s joint & survivor beneficiary; can Member change jt & survivor beneficiary due to divorce?

• Not unless DRO allows; DRO cannot allow unless GJ allows • What if parties agree, post GJ but pre-DRO?

• GAP MONTHS• Gap months are months (sometimes many, many months) btwn

GJ and date on which PERS begins direct distributions to AP• PERS cannot begin AP distributions until PERS receives and

begins administering DRO • PERS Divorce Unit gives administrative priority to DROs

concerning retired members• If GJ is silent, AP is OUT OF LUCK!• Drafting Example – pg. 25 of materials

Free and Clear Awards in GJ: Expressly identify each retirement asset, even if it is being awarded exclusively to plan participant; silence will come back to bite.

HYPOTHETICAL #8: Marriage of Soprano & Soprano

(pg. 26-27)

Things got unbearable …

37-year marriage, 1980 (DOM) Toni & Carmella separated in Dec 2016 (DOS) Tony has 5 years of premarital service in Union Plan A (DBP 1) & no QDRO

has been received by DBP 1 concerning the prior marriage; prior spouse died mysteriously.

o Union Plan A (“DBP 1”) benefit is currently in payout status under a 50% jt & survivor benefit with Carmella

o Gross monthly benefit is $3,600 o According to Plan rules, Tony can pop-up to a single life annuity due

to divorce (and therefore boost his monthly benefit to $4,000) o DBP 1 does not have a 100% jt & surv benefit option o Address premarital service time vs married service time o Tony was inactive in DBP 1 since 2000 (he had 26 yrs of service, 21 of

which was accrued during the marriage)

Tony switched employers / unions in 2000 o Union Plan B (“DBP 2”) – he is an inactive, non-retired P o Accrued creditable service from Dec 2000 through Dec 2015 o Estimated monthly benefit at normal rtmnt age (65 yrs) is

$5,000 for single life, $4,500 for 50% jt & survivor benefit or $4,250 for 100% jt & surv

o Eligible for normal retirement at age 65 or early rtmnt (w/ reduced benefit) now

o Bells and whistles plan: 13th month payments, guaranteed COLAs, J&S options 50% , 75% or 100% Jt & Surv benefit

o 401(k) Plan balance of $500,000

Carmella – no premarital retirement interests; homemaker o She has $300,000 in Traditional IRA, all marital; no contributions

since DOS o Equalize 401k and IRA via one DRO? or use two DROs, each assigning

50%?

C’s Plan A proposal: DCPs: She would keep 100% of her IRA, and get an (offset)

assignment ($100,000) from T’s 401(k) that equalizes the IRA & 401k. DBP 1: C gets 50% (or lesser % based on Tony’s pre-marital service) of

monthly benefit during parties’ joint lifetime, and 100% of the ‘50% survivor (remainder) benefit’ if he predeceases her (hint: she’s already entitled to the entire survivor benefit under the retirement contract). C’s award to include pro rata share of supplemental payments, subsidies, COLAs, and like adjustments, if any; if she predeceases Toni, he is allowed to convert to single life benefit if permitted by the Plan; otherwise, GJ needs to prohibit him from changing jt & survivor beneficiary, or changing the current form or type of benefit during parties’ joint lifetime.

DBP 2: C wants 50% of monthly benefit during parties’ joint lifetime; she wants T to be ordered to select a 100% joint and survivor benefit and designate C as the joint and survivor annuitant. Tony is in poor health & under jurisdiction of the federal witness protection program. C is certain he is on death’s door and she’s willing to give now in order to get later, so she may accept less than 50% of the joint lifetime benefit, if it means 100% of the 100% Jt & Surv benefit option.

DBP 2: Tony wants C to accept 25% of the joint lifetime benefit in exchange for 100% Jt & Surv; if not, then he insists that the GJ should provide that if he predeceases C, then his 50% share of the remainder benefit will be distributed to the beneficiary(ies) that he designates for that purpose, until C’s (the survivor’s) death. Does the Plan permit this ‘further assignment of a survivor benefit’ if ordered by a court?

C’s award should include pro rata share of supplemental payments, subsidies, COLAs, and similar adjustments. C should also be awarded 100% of any PRSA/pre-retirement survivor benefit if T should predecease her before benefits commence. If the joint & survivor benefit scheme cannot be resolved, then a party could pursue and the court could a separate interest award to Carmella of 50% of T’s accrued benefit determined as of his normal retirement eligibility date. But the 100% Jt & Surv benefit would yield her a far greater benefit over her lifetime, assuming she outlives Tony.

C will want to retain DRO counsel, have control over forms of DROs. T should contribute 50% of the costs of each DRO, up to $400 for each DCP order and up to $500 for each DBP order. He is solely liable for his own DRO attorney fees, should he seek independent DRO counsel.

When the disposition of a retirement benefit in the GJ is ambiguous and the parties subsequently cannot agree on a form of (Q)DRO, court intervention will be sought. There are limited ways to approach this, and (Q)DRO attorneys and general divorce counsel will look to the GJ for guidance on this. The following sample language can be useful for getting the issue before the court.

However, OSB ethics counsel cautions us to “avoid ‘retaining jurisdiction’ language. It is meaningless and causes confusion. The jurisdiction of Oregon courts is set by statute. The court either has jurisdiction to decide a post-judgment motion, or it doesn’t.”

SAMPLE LANGUAGE, WHICH MAY BE HELPFUL BUT CONFUSING AND ULTIMATELY MEANINGLESS:

The Court retains jurisdiction over the retirement benefits identified in this section, in order that it may enter such orders as are necessary to clarify this judgment in order to accomplish the goals expressed herein.

The Court retains jurisdiction over the parties and over ________’s retirement benefits until a domestic relations order acceptable for administration by the retirement Plan administrator is presented to and administered by the Plan.

The Court retains jurisdiction over the parties and the parties’ respective interests in the retirement plans described above, to effect the assignment and transfer of retirement assets as described in this Section XX.

The Court retains jurisdiction over the division of Husband’s retirement benefits so that it can enter necessary (Q)DRO(s) and make clarifications to this judgment that may be necessary to conform to the retirement plan terms and procedures and to fulfill the goals stated herein related to division of retirement benefit(s).

What did the retirement plan say to the divorce lawyer?

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