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SCERS DROs: Dividing Sacramento County Employees’ Retirement System Benefits in Divorce

by Madeline Hill | Mar 20, 2013 | General QDRO Info, Public Employee Plans, SCERS - Sacramento County

SCERS & DIVORCE – WHAT IS A DRO?

Employees of Sacramento County are members of the Sacramento County Employees’ Retirement System (SCERS). SCERS benefits take the form of a defined benefit plan, which means that the benefits paid to retired members are based upon a formula. Retirement payments are based upon three factors: the member’s age at retirement, years of service, and salary. In order to be vested in SCERS, members must have 10,440 service credits; members earn one service credit for each hour of pay. Members make contributions to SCERS through regular payroll deductions and it is not possible to borrow funds from the SCERS retirement fund account.

Retirement benefits acquired during marriage, such as SCERS benefits, are subject to division during divorce. The division of these benefits is accomplished by a special court order called a Domestic Relations Order or DRO. SCERS must have a valid, court-filed DRO that has been signed by both the parties and the judge in order to make payments directly to a non-member spouse. Distributions of SCERS benefits are governed by Article 8.4 of the County Employees’ Retirement Law of 1937, which begins at Section 31685 of the California Government Code. This legislation provides for the division of the community property interests of SCERS Members in accordance with the provisions of a Court order setting forth the terms and conditions of the dissolution of a Member’s marriage issued pursuant to Section 2610 of the Family Code.

MANDATORY JOINDER & OBTAINING INFORMATION

Joinder is a legal process that names a third-party claimant to a divorce case and notifies the retirement plan that a former spouse has a right to a portion of an employee’s benefits. SCERS requires a joinder to be filed and served on the plan before a Domestic Relations Order can be approved and implemented. Both a joinder and DRO will be required before a non-member can begin receiving payments from SCERS. Your family law attorney may have already completed a joinder; however, QDRO Helper also offers joinder services for an additional fee.

As soon as a dissolution of marriage action is filed in court, the parties should notify SCERS in writing about the pending dissolution, including the parties’ date of marriage and separation, names, dates of birth, social security numbers and current contact information. SCERS is required to maintain confidentiality of member’s records; however, either upon subpoena or written authorization from the SCERS member, the plan will provide a valuation of the Member’s account. The valuation will specify the approximate community property interest that the former spouse can either withdraw or receive as a monthly retirement allowance for life when eligible.

DIVISION OF BENEFITS

The most common method of division for a non-retired member is to award the non-member spouse 50% of the accumulated retirement contributions and service credit attributable to the period of service from the parties’ date of marriage through their date of separation. Prior to the member’s retirement, a Nonmember may elect to establish a separate account and may exercise the same rights as a Member, except that a Nonmember is not eligible to apply for or receive a disability retirement allowance, a Nonmember’s pre-retirement death benefits shall consist of return of the contributions and interest in the Nonmember’s account, and a Nonmember is not eligible to participate in the election of trustees. A Nonmember may retire and elect optional allowances. SCERS will ensure that the combined benefits payable to the Member and Nonmember are the actuarial equivalent of the value of the benefit to which the Member would have been eligible had no division of the community property interest occurred. Each party will have a separate account and will have exclusive control over his/her own account.

If a member is already retired at the time that DRO is implemented, SCERS will split the Member’s benefits and a separate account will not be created for the Nonmember. Instead, the Nonmember will receive a portion of each payment made to the Member, typically the portion is based upon the Time Rule Formula.

NEED A SCERS DRO?

If you have questions about the division of SCERS benefits due to your California dissolution of marriage or legal separation, or if you would like to get started on your Domestic Relations Order today, please call QDRO Helper at (619) 786-QDRO / (619) 786-7376. You can also request a new client package by sending an email to a friendly California QDRO attorney at info@qdrohelper.com. We proudly assist clients throughout California and no in-office appointments are required.

If you have questions about your particular SCERS retirement benefits, you can contact SCERS at (916) 874-9119 or request information in writing addressed to Sacramento County Employees’ Retirement System, 980 9th Street, Suite 1900, Sacramento, CA 95814.

DISCLAIMER: ADVERTISEMENT. Any legal information on this blog has been prepared by QDRO Helper for informational purposes only and is not legal advice and does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. The information provided is intended to comply with Rule 1-400 of the California Rules of Professional Conduct. Any links in this website are included only to help you locate other Internet resources that may be of interest to you; QDRO Helper is not associated with any such links. The transmission and receipt of information contained on this website via the Internet or e-mail or in any other manner does not constitute or create an attorney-client relationship, and you should not act on the information contained herein without obtaining legal counsel. QDRO Helper has a strict policy of entering into attorney-client relationships with its clients only though the execution of a written fee agreement acknowledged by QDRO Helper. As such, you should not send QDRO Helper any confidential information in response to this web page until such a relationship is established and expressly acknowledged by QDRO Helper.

KCERA DROs: Dividing Kern County Employees’ Retirement Association Benefits in Divorce

by Madeline Hill | Jan 11, 2013 | Defined Benefit Plans, General QDRO Info, KCERA, Public Employee Plans

KCERA & DIVORCE – GENERAL INFORMATION

Membership in the Kern County Employees’ Retirement Association (KCERA) is automatic for any employee who is appointed to a permanent position that meets certain hourly requirements. Membership in KCERA begins on the first day of the payroll period following the employee’s date of hire, and every member is either a safety member or general member. KCERA is a defined benefit plan that is administered by the Board of Retirement. Like other types of assets acquired during marriage, KCERA benefits are subject to division during divorce. The division of these benefits is accomplished by a special court order called a Domestic Relations Order or DRO. Kern County also offers the Kern County 457 Deferred Compensation Plan to its employees; that plan is not addressed in this article, but the attorneys at QDRO Helper can also assist with the division of those deferred compensation plan benefits.

KCERA JOINDER REQUIREMENT & EFFECT OF JOINDER

Joinder is a legal process that names a third-party claimant to the parties’ divorce case. In order for KCERA to respond to a DRO, pursuant to California Family Code §2060(b), a joinder must be filed and served on KCERA. Joinder is the first step in obtaining an Order to divide Kern County Employees’ Retirement Association benefits. Once the joinder is served on KCERA, KCERA will place a hold on the member’s account. No funds will be paid out from the member’s KCERA account until the plan receives a DRO or court order that specifies the division of the benefits. Until receipt of the joinder and DRO, the member will not be able to retire and begin receiving payments. Further, if the parties divorce after retirement, as soon as KCERA is served with the joinder documents, KCERA will reduce benefit payments to the member by 50% until a court-approved DRO is received. At that time, if the member was underpaid, the member will issue all underpaid benefits to the member. Your divorce attorney may have already filed a joinder for you, if not, QDRO Helper offers joinder services for a reasonable fee.

OBTAINING INFORMATION ABOUT KCERA BENEFITS

Individual retirement records are confidential; however, they can be disclosed to the member or to another person authorized by the member in writing to receive the records. The records can also be released with the appropriate court order or subpoena. At the member’s request, KCERA can provide an estimate of the community property share of the member’s account. A request for that information should include the member’s name and social security number, the nonmember’s name, social security number and date of birth, the parties’ dates of marriage and separation. KCERA can also provide information about the member’s date of hire and date of membership in KCERA.

DIVISION OF BENEFITS

Usually, the nonmember spouse is awarded one-half of the community property interest in the retirement benefits pursuant to the formula described in Marriage of Judd (1977), 68 Cal.App.3d 515, 522, also known as the Time Rule Formula. You can read more about the Time Rule Formula here.

KCERA, unlike some other county government plans, does not currently offer the option to create a separate account on behalf of the nonmember spouse. Instead, the nonmember spouse will receive a portion of each payment made to the member. Since each payment to the nonmember spouse is only made when a payment is made to the member, a lifetime benefit to the nonmember spouse is not guaranteed and should not be assumed.

EFFECT OF NONMEMBER’S DEATH & MEMBER’S DEATH

If the nonmember spouse dies before payments commence under the DRO, the payments that would have been made to the nonmember spouse will instead be paid to the nonmember spouse’s estate. If the member dies before retirement, the nonmember spouse will receive a pro-rata share of any survivor’s benefits which the plan is obligated to pay.

QUESTIONS ABOUT KCERA DROs?

If you have questions about the division of KCERA benefits, or if you would like to get started on your KCERA Domestic Relations Order today, please call QDRO Helper at (619) 786-QDRO / (619) 786-7376. You can also request a new client package by email or here. We proudly serve clients who live in Bakersfield and throughout California – no in-office appointments required.

DISCLAIMER: Any legal information on this blog has been prepared by QDRO Helper for informational purposes only and should not be construed as legal advice. The material posted on this website is not intended to create, and receipt of it does not constitute, an attorney-client relationship, and readers should not act upon it without seeking professional counsel. Note also that sending an e-mail to QDRO Helper does not create an attorney-client relationship, and none will be formed unless there is an express agreement between the firm and the individual. We strongly advise against sending confidential or privileged information to QDRO Helper until you can establish such a relationship.

San Luis Obispo County Pension Trust & Divorce

by Madeline Hill | Nov 14, 2012 | General QDRO Info, Public Employee Plans, SLO County Pension Trust

Every permanent employee of San Luis Obispo County is required to become a member of the San Luis Obispo County Pension Trust. Each member contributes a percentage of his/her salary to the Pension Trust; members can also make voluntary contributions. The employer also contributes a percentage of each member’s salary to the Pension Trust. Contributions made to the Pension Trust during marriage are considered community property and are subject to division under California law due to divorce or legal separation. The court order used to divide these retirement benefits is called a Domestic Relations Order or DRO. Under the DRO, the employee is called the “member” and the non-employee former spouse is called the “Alternate Payee”.

JOINDER REQUIREMENT FOR SLO COUNTY PENSION TRUST

The San Luis Obispo County Pension Trust must be joined before a DRO can be implemented. Joinder is a legal process that names a third-party claimant to a divorce case; the Pension Trust is a third-party claimant to any dissolution case which involves San Luis Obispo County Pension Trust benefits. The joinder will put the Plan on notice of the pending dissolution action and forthcoming DRO, and will give the court jurisdiction over the SLO County Pension Trust. Often divorce attorneys file the joinder as part of the dissolution proceedings. However, if needed, QDRO Helper can file the necessary joinder documents for you for an additional fee .

METHODS OF DIVISION

There are two basic methods utilized for dividing San Luis Obispo County Pension Trust benefits for active or reserve members. There is only one option for dividing the benefits of a member who has already retired. The methods of division are described below.

Method 1: Payout of the Alternate Payee’s Share at the Time the Member Retires or Dies

Under the first method of division, the Alternate Payee will receive a portion of each payment made to the member, or upon the member’s death, based upon his/her community property interest. Payments will only commence to the Alternate Payee either 1) upon the Member’s actual retirement or 2) upon the death of the Member. Typically, the Alternate Payee’s share is determined using the “Time Rule” formula, i.e. the Alternate Payee will receive 50% of the Member’s monthly retirement allowance multiplied by a fraction where the numerator is the Pension Trust Service Credit attributable to the Member’s employment during the marriage (from date of marriage through the date of separation), the denominator is the total of the Member’s Pension Trust Service Credit at the Effective Date of Retirement.

Under this method of division, the DRO may order the Member to elect a payment option that provides a survivor benefit annuity to the former spouse. The Optional Settlement that is to be elected by the Member must be specifically named in the DRO. There are 4 optional settlements that will allow for benefits to be paid to the former spouse upon Member’s death, aptly named Optional Settlement 1, Optional Settlement 2, Optional Settlement 3, and Optional Settlement 4. If the Member chooses and “Unmodified Retirement”, there are no survivor benefits and all payments to the Alternate Payee will cease upon the Member’s death. More information on the options available can be obtained by contacting the San Luis Obispo County Pension Trust.

Under method 1, if the Member ceases working for SLO County and elects to receive a refund of his/her contributions (which will not include contributions made by the employer), then the Alternate Payee would receive his/her share of the refunded contributions based on the formula specified in the DRO.

Method 2: Separate Account Established for the Alternate Payee

The second method of division for active members order the Plan to split the member’s service credit and contributions, and to establish a separate account for the Alternate Payee. This allows the Alternate Payee to decide on his/her own retirement option (either “Unmodified” or an “Optional Settlement” that names a beneficiary) and to have more control over when payments to the Alternate Payee will commence. Even if the Member is still working, the Alternate Payee can apply for and receive a refund of his/her share of the accumulated contributions available for refund. The Alternate Payee could can “retire” and begin receiving monthly annuity payments once the Member’s interest in the plan is vested and both the Member and Alternate Payee are 50 years old. The disadvantage of this method is that the Alternate Payee will not share in any increased value of the Member’s retirement allowance due to increases in compensation before retirement. The “compensation” factor of the annuity calculation is frozen as of the parties’ date of separation under Method 2. The Alternate Payee typically will be awarded 50% of the contributions made during the marriage – from the date of marriage through the date of separation.

Method 3: For Retired Members

Similar to Option 1 above, the Alternate Payee’s share will be calculated using the “Time Rule” and the Plan will make payments to the Alternate Payee until the retired Member’s death. Benefits will only be paid after the Member’s death if the Member chose an Optional Settlement at retirement and named the Alternate Payee as the beneficiary of the Optional Settlement. The option selected at retirement cannot be changed.

QUESTIONS ABOUT DIVIDING SAN LUIS OBISPO COUNTY PENSION TRUST BENEFITS?

If you have questions about dividing Pension Trust benefits or if you would like to get started on your DRO today, please call QDRO Helper at 619-786-QDRO (619-786-7376). Click here to request a new client package for a SLO County Pension Trust DRO. We proudly serve clients throughout California – no in-office appointments are needed.

DISCLAIMER: Any legal information on this blog has been prepared by QDRO Helper for informational purposes only and should not be construed as legal advice. The material posted on this website is not intended to create, and receipt of it does not constitute, an attorney-client relationship, and readers should not act upon it without seeking professional counsel. Note also that sending an e-mail to QDRO Helper does not create an attorney-client relationship, and none will be formed unless there is an express agreement between the firm and the individual.

LACERS Benefits & Divorce: Los Angeles City Employees Retirement System

by Madeline Hill | Oct 31, 2012 | General QDRO Info, Public Employee Plans

If a member earns Los Angeles City Employees Retirement System (LACERS) benefits during marriage, those benefits are community property and are subject to division due to divorce, legal separation, or dissolution of a registered domestic partnership.

JOINDER REQUIREMENT

If the dissolution or separation matter is filed in a California court, then LACERS must be joined. Joinder is a legal process that names a third-party claimant to a divorce case. The joinder will put LACERS on notice of the pending dissolution action and forthcoming DRO, and will give the court jurisdiction over LACERS. If needed, QDRO Helper can file the necessary LACERS joinder documents for you for an additional fee.

NONMEMBER SPOUSE NOTICE OF INTEREST

In addition to the Joinder, the nonmember should also notify LACERS in writing that he/she is claiming his/her community property interest if the member’s benefits. The letter should include the parties’ date of marriage and date of separation, as well as the member’s name and social security number. This letter can be mailed to LACERS at 360 East Second Street, 2nd Floor, Los Angeles, CA 90012-4207. However, please note that the nonmember spouse will not be able to receive benefits until a domestic relations order is drafted, signed by the parties, filed at court, and sent to LACERS for implementation.

HOW BENEFITS ARE DIVIDED: IN-KIND DIVISION OR SEPARATE ACCOUNT

In-Kind Division:

For the “in-kind” division, the nonmember spouse is typically awarded one half of the community interest in the LACERS benefits. The community property interest is determined by the “time rule formula” – i.e. a fractional interest where the member’s service from the date of marriage through the date of separation (or “marital service”) is divided by the member’s total service. The Order may also specify that any service time purchased during the marriage be considered marital service. Although dividing the community interest 50/50 is the most common method of division, the nonmember could receive any percentage of the benefits awarded in the parties’ separation agreement or divorce judgment.

The nonmember may take his/her distribution “in-kind” which means that the nonmember will be paid a portion of the member’s pension for the member’s lifetime (and, if applicable, for the lifetime of the member’s surviving spouse). If the nonmember outlives the member (and the member’s surviving spouse) the payments to nonmember will cease. If the nonmember dies before the member (and the member’s surviving spouse), depending on the domestic relations order, the share would pass either to the nonmember’s beneficiary or heirs, or could revert to the member.

Alternatively, after the court order is filed, the nonmember spouse may elect to convert his/her “in-kind” interest to a life annuity based on the nonmember’s lifetime. This election will alleviate the risk of losing all benefits if the member (and/or the member’s then-current spouse) predeceases the nonmember former spouse. Upon the nonmember’s death, all benefit payments from LACERS stop.

Separate Accounts

If the DRO provides for the establishment of separate accounts, the nonmember has two options for distribution: 1) the nonmember can receive a refund of contributions and will relinquish any right to monthly benefits in the future or 2) the nonmember can receive a separate account allowance, payable for his/her lifetime. Note, that if the nonmember elects option 2, the allowance will be calculated based upon a formula using the member’s compensation at the parties’ date of separation, not the time that the allowance becomes payable. Another important restriction on the Separate Account method is that if the member never becomes eligible for a service retirement (due to death or disability retirement), then the nonmember cannot receive a separate account allowance (i.e. monthly payments), instead the only form of payment will be a refund of contributions.

It should be noted that a “refund of contributions” is a refund only of the contributions that the member paid in from the member’s salary, plus the interest on those contributions. This may not reflect the true value of the member’s benefits since a refund of contributions does not include any compensation paid for by the City.

It should also be noted that if the separate account method is used and if the nonmember spouse takes a refund of contributions, then the member can repay LACERS to restore his/her service credit under the Plan.

How Do I Decide Which Method to Choose?

There are pros and cons to both methods of division, and the best option for you will depend on your unique circumstances. The separate account method uses the member’s compensation at the date of separation while the in-kind division is based on the member’s compensation at the time of retirement. Since the member’s compensation at retirement is likely to be more than at the time of separation, the amount of the monthly benefit the nonmember receives with the separate account order is usually less than what he/she would receive with a typical in-kind division. However, the nonmember must wait for the member to retire before the nonmember can receive benefits under the in-kind division. The separate account allowance is paid for the nonmember’s lifetime, and will not be affected by the member’s death, while the in-kind division may or may not be payable, in this manner, depending upon whether the nonmember elects to take a life annuity at retirement.

One distinct advantage of the separate account method is that if the member is eligible to retire but is still working, the nonmember can start to get benefits before the member retires, assuming that all service retirement eligibility requirements have been met. This can be advantageous when the nonmember is significantly older than the member. If the nonmember can claim the separate account allowance now, the final compensation payable to the nonmember spouse over his/her lifetime may be similar what an in-kind order would provide. However, a distinct drawback to the separate account is that if the member never becomes eligible for a service retirement, due to death or disability, the nonmember can only receive a refund of contributions and interest paid in by the member, which would result in a loss of any employer contributions to the plan.

If you are unsure what option to choose, you should know that once a separate account is established by the Plan pursuant to the court order, the nonmember no longer has any right to an in-kind division. However, if an in-kind division is ordered by the court, and the court retains jurisdiction, then the order can be modified to establish a separate account in lieu of an in-kind division as long as the modification occurs prior to the member’s retirement.

The information provided here is only a basic summary. You should call LACERS at (213) 485-4917 if you have questions about your options.

NEED HELP WITH A LACERS COURT ORDER?

If you would like to get started on your LACERS DRO today, please call QDRO Helper at 619-786-QDRO (619-786-7376). Alternatively, you can click here to request a new client package for a LACERS court order. We proudly serve clients and attorneys throughout California – no in-office appointments are needed.

DISCLAIMER: Any legal information on this blog has been prepared by QDRO Helper for informational purposes only and should not be construed as legal advice. The material posted on this website is not intended to create, and receipt of it does not constitute, an attorney-client relationship, and readers should not act upon it without seeking professional counsel. Note also that sending an e-mail to QDRO Helper does not create an attorney-client relationship, and none will be formed unless there is an express agreement between the firm and the individual

ICERS DROs: Dividing Imperial County Employees’ Retirement System Benefits During Divorce

by Madeline Hill | Oct 3, 2012 | Defined Benefit Plans, General QDRO Info, Public Employee Plans

ICERS & DIVORCE – GENERAL INFORMATION

Employees of Imperial County are members of the Imperial County Employees’ Retirement System (ICERS). The retirement system is not a department of Imperial County government; instead it is a separate legal entity managed by the Board of Retirement which is responsible for the management of investments and benefits for ICERS members. There are two types of ICERS membership: 1) Safety Members (employees in law enforcement, fire suppression and certain probation officers) or 2) General Members (all non-safety members). Like other assets acquired during marriage, ICERS benefits are subject to division during divorce. The division of these benefits is accomplished by a special court order called a Domestic Relations Order or DRO. The law governing ICERS is Cal.Gov.Code §31450 et seq.

JOINDER REQUIREMENT

Joinder is a legal process that names a third-party claimant to the parties’ divorce case. ICERS requires a joinder to be filed and served on the plan before a Domestic Relations Order can be approved and implemented. Joinder is the first step in obtaining an Order to divide ICERS benefits. Your family law attorney may have obtained a joinder; however, QDRO Helper also offers joinder services.

REQUESTS FOR INFORMATION

The contents of a member’s file are confidential and can only be provided to the member or the member’s authorized representative. In order for the nonmember to receive information about the Member’s account, ICERS must be joined to the action, and either i) a subpoena duces tecum must be served or ii) the member must provide ICERS with a written authorization to release information to the nonmember or the nonmember’s attorney. ICERS has a policy for resisting subpoenas for information, so it is often best to obtain a court order against the member requiring him/her to execute the necessary written authorization.

DISSOLUTION OF DOMESTIC PARTNERSHIP & ICERS BENEFITS

ICERS benefits can be divided due to dissolution or termination of a registered domestic partnership, under The California Domestic Partner Rights and Responsibilities Act. However, the federal government does not currently recognize domestic partners as spouses for tax purposes, which causes unique problems for domestic partners dividing a retirement benefits. Domestic partners should contact both a tax advisor and ICERS regarding the unique challenges in dividing these benefits due to the dissolution of a domestic partnership.

NONMEMBER’S DEATH

The nonmember spouse has the right to name a beneficiary, or beneficiaries, for the nonmember’s share of the ICERS benefits. If the DRO is prepared prior to the member’s retirement, then the nonmember’s beneficiary will receive any portion of the nonmember’s ICERS interest which is payable upon the nonmember’s death. If the DRO is prepared and implemented after the member’s retirement, then the nonmember’s beneficiary will continue to receive the nonmember’s monthly payments until the death of the member.

REFUND OF RETIREMENT CONTRIBUTIONS

If a member is not retired at the time of drafting the DRO and does not have five years of accumulated service credit as of the parties’ date of separation, then the nonmember spouse will receive a refund of his/her share of the member’s accumulated retirement contributions and any interest thereon.

QUESTIONS ABOUT ICERS DROs?

If you have questions about the division of ICERS benefits due to your California dissolution of marriage or domestic partnership, or if you would like to get started on your Domestic Relations Order today, please call QDRO Helper at (619) 786-QDRO / (619) 786-7376 or click here to get started .

DISCLAIMER: Any legal information on this blog has been prepared by QDRO Helper for informational purposes only and should not be construed as legal advice. The material posted on this website is not intended to create, and receipt of it does not constitute, an attorney-client relationship, and readers should not act upon it without seeking professional counsel. Note also that sending an e-mail to QDRO Helper does not create an attorney-client relationship, and none will be formed unless there is an express agreement between the firm and the individual. We strongly advise against sending confidential or privileged information to QDRO Helper until you can establish such a relationship.

OCERS QDROs: Orange County Employees Retirement System Benefits & Divorce

by Madeline Hill | Aug 23, 2012 | Defined Benefit Plans, General QDRO Info, OCERS, Public Employee Plans

BASIC PLAN INFORMATION

Employees of Orange County earn retirement benefits under the Orange County Employees Retirement System (OCERS). Both employers and employees (or “members”) make contributions to OCERS. Upon retirement, OCERS provides a monthly benefit that is based on the type of plan, the employee’s age at retirement, average monthly earnings during employment, and the number of years of service. Upon divorce, parties will require a Domestic Relations Order (or “DRO”) to divide the community property interest in OCERS benefits. A DRO is a court order that provides the retirement plan with instructions about how to divide the benefits, and when to pay them, to the employee’s former spouse.

JOINDER REQUIREMENT

In order for OCERS to implement a Domestic Relations Order (“DRO”) the must be joined to the divorce proceeding. Joinder is a legal process that names a third-party to an existing court case. A joinder is the first step in obtaining a DRO to divide an OCERS benefit. Your family law attorney may have prepared a joinder already; however, QDRO Helper can assist you with the preparation and service of a joinder for an additional fee .

TYPICAL DIVISION OF OCERS BENEFITS: TIME RULE / BROWN / JUDD FORMULA

OCERS benefits, like many traditional pension plans, are most often divided using what is known as the
“Time Rule Formula”, “Brown Formula” or “Judd Formula”. All three terms refer to a formula which utilizes a ratio between the time of employment during marriage and the total time of employment in order to calculate a former spouse’s share of retirement benefits. Under these formulas, the community property portion of the accrued retirement benefit payable by the Plan is determined by a percentage of the benefit determined by a fraction, the numerator of which is the number of months the Member earned a benefit under the Plan during the marriage and the denominator of which is the total number of months the Member earned a benefit under the Plan through date of the Former Spouse’s benefit commencement date. The Former Spouse’s benefit is determined by multiplying the community property portion by one-half.

Other options for division can be discussed as part of the divorce settlement process; however, your judgment or marital settlement agreement should not specify a specific lump sum dollar amount payment, as that is not a payment option under OCERS and any DRO specifying a lump sum payment will be rejected by the Plan.

DEATH AND SURVIVOR BENEFITS

If the Former Spouse dies before the Member, then all payments that would have been payable to the Former Spouse will be paid instead to the Former’s Spouse’s beneficiary or estate.

If the Member dies before the Former Spouse, the Former Spouse will receive a pro-rata share of any survivor benefits available under the Plan. The pro-rata share will be determined using the same formula as was used to determine his/her community interest in the plan, such as the Judd Formula described above.

NEED HELP WITH AN OCERS DRO?

If you need help with an OCERS Domestic Relations Order, call QDRO Helper today at 619-786-7376. You can also send an email to info@qdrohelper.com to request new client packet to divide an OCERS benefit. Get started on your QDRO today by downloading forms here. By utilizing technology, we are able to offer attorney-drafted QDROs to clients in Orange County, California, including Santa Ana, Irvine, Huntington Beach, Garden Grove, Fullerton, Costa Mesa, and Anaheim without any in-office appointments required.

DISCLAIMER: Any legal information on this blog has been prepared by QDRO Helper for informational purposes only and should not be construed as legal advice. The material posted on this website is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Note that sending an e-mail to QDRO Helper does not create an attorney-client relationship, and none will be formed unless there is an express agreement between the firm and the individual.