SBCERA & DIVORCE – WHAT IS A DRO?
Employees of San Bernardino County are members of the San Bernardino Employees’ Retirement Association (SBCERA). SBCERA is a public agency created to administer retirement benefits. These retirement benefits take the form of a defined benefit plan, which means that the benefits paid to retired members are based upon a formula, not monetary contributions to an account (like a 401k plan). Retirement payments are based upon the member’s age at retirement, years of service credit, highest 12 consecutive months of compensation, and the benefit formula. There are two types of members under SBCERA: General member and Safety Members.
Retirement benefits acquired during marriage, such as SBCERA 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 DRO directs the SBCERA to pay benefits directly to the non-employee spouse. SBCERA cannot legally make payments to a member’s former spouse without a valid, court-filed DRO that has been signed by both the parties and the judge.
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. SBCERA 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 SBCERA benefits. Your family law attorney may have obtained a joinder; however, QDRO Helper also offers joinder services.
DIVISION OF BENEFITS & RETIREMENT OPTION
Usually the non-member former spouse’s award is calculated as one-half of the benefits attributable to the member’s service in SBCERA during the time period from the parties’ date of marriage through their date of separation. Your Domestic Relations Order (DRO) must specify the retirement option the member is to select at the time of retirement to provide for a continuance to a former spouse. There are four options that can be used to provide survivor benefits, namely:
1. Unmodified Option –provides for a 60% continuance to an eligible surviving spouse. The former spouse may be entitled to a portion of a surviving spouse’s continuance. However, if the unmodified option was selected by the Member at retirement, but prior to the member’s divorce then the spouse named as the beneficiary at the time of retirement, which is now the former spouse, will no longer qualify for the unmodified continuance. This is pursuant to Government Code section 31760.1 or for death benefits under Government Code sections 31765, 31765.1, or 31786.
2. Option 2 – provides for a 100% continuance to the nominated beneficiary (i.e. former spouse).
3. Option 3 – provides for a 50% continuance to the nominated beneficiary (i.e. former spouse).
4. Option 4 – provides for various continuances to multiple beneficiaries, such as the former spouse and/or an eligible surviving spouse. Typically, the continuance is based on the calculation of a share of the benefit payable to the former spouse.
The DRO should also address pre-retirement death benefits in the event that the member dies during active employment. Typically the former spouse is awarded one-half of the death benefits attributable to the member’s service in SBCERA during the time period from the parties’ date of marriage through their date of separation.
Unlike some other county retirement plans which offer “shared” or “separate” methods of division, SBCERA is unable to create separate accounts for the member and his/her former spouse.
The nonmember spouse has the right to name a beneficiary, or beneficiaries, for the nonmember’s share of the SBCERA benefits. If the nonmember has not named a beneficiary, then the nonmember’s share of benefits will be paid to the nonmember’s estate.
NEED A SBCERA QDRO?
If you have questions about the division of SBCERA 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 clicking here or sending an email to firstname.lastname@example.org.
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