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 email@example.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.
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