Gillmore Rights and Your California QDRO
WHAT ARE GILLMORE RIGHTS?
Often an employee wants to continue working past her earliest retirement age. If the employee is divorced and her former spouse wants to start receiving benefit payments based on his community interest in the retirement plan, Gillmore rights allow him to start receiving his share of benefits before his former spouse actually retires. Specifically, these rights give an non-employee former spouse the ability to receive his/her community property share of the employee former spouse’s benefits at the earliest date on which the employee would be eligible to retire, regardless of whether the employee actually retires at that time. This option to commence benefits at the earliest retirement date is governed by federal law 29 USC §1056(d)(3)(E)(i); Internal Revenue Code §414(p)(4); and a California court case Marriage of Gillmore (1981) 29 C3d 418. These rights get their name from the Marriage of Gillmore case where the court determined that an employee who continues working past the date of retirement eligibility can be ordered to pay his/her former spouse his/her community share of benefits.
WHAT IS A GILLMORE ELECTION?
A “Gillmore Election” occurs when a non-employee spouse makes a motion in court to demand payment of benefits from the plan or the participant. (The process is started by filing form FL-300.) However, if a Qualified Domestic Relations Order is already in place granting the non-employee spouse a separate interest in the plan, the non-employee former spouse can simply contact the plan and commence receipt of benefits.
OTHER CONSIDERATIONS REGARDING GILLMORE RIGHTS
A Gillmore election is irrevocable. Therefore, if the non-employee former spouse commences benefits before the employee actually retires, the non-employee will not be entitled to share in any future benefit increases due to the employee’s continued service, increased age, or increased salary. The non-employee spouse will still be entitled to cost-of-living adjustments.
It is possible for parties to waive Gillmore rights explicitly as part of the divorce proceedings. However, parties should be aware that if they choose to divide retirement benefits by the Time Rule formula instead of a separation of account method, this can be construed as an implicit waiver of Gillmore rights, unless the QDRO states otherwise. Many plans, such as CalPERS, CalSTRS, and government plans require language in their Domestic Relations Orders stating that payments to the non-employee will not commence until the member actually retires and begins receiving payments. This is with regard to the plan and payments made directly by the plan only; a non-employee spouse could still seek court action against the former spouse to receive payments directly from the still-working employee.
QUESTIONS ABOUT YOUR CALIFORNIA QDRO OR GILLMORE RIGHTS?
If you have questions about Gillmore rights, dividing retirement benefits due to divorce, or if you would like to get started on your QDRO today, please call QDRO Helper at 619-786-QDRO (619-786-7376). Alternatively, you can email email@example.com and request a new client package.
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