We have a situation where we have a QDRO, the alternate payee has died and did not name a beneficiary. In paying the benefits due the AP, do we just pay to the AP's estate (which is what we do if a participant does not name a beneficiary and has no spouse, etc.)?

Alt payee would be treated just like participant. What does the plan say happens if participant dies w/o beneficiary?

I'd recommend reading the QDRO again to make sure it does not say something unusual in the case of death. These can be written in ways that may surprise you.

I beg to differ with Janet M. The QDRO itself will determine what happens in the event the alternate payee dies prior to receiving full payment. Plan terms are irrelevant (unless the QDRO is silent).

What does the plan say if a beneficiary dies? Alternate payees are more like beneficiaries than participants in many respects, including ERISA provisions that treat APs as beneficiaries. What do the written QDRO procedures say about the interest of the alternate payee and beneficiaries of alternate payees? What does the order say? Assuming that this is a defined contribution plan that allows alternate payees to designate beneficiaries, and assuming no answer from the other sources, the money would probably go to the estate of the alternate payee. You really should have a clear answer from the other sources. If not, you need to work on the documents.

I have requested a copy of the QDRO to review the language again. The plan states that if a participant dies without a beneficiary (and isn't married), the proceeds go to the participant's estate. I'll see what the QDRO procedures provide to see if this is addressed. I'll also see what it says about a beneficiary.... thanks for the suggestions... I'll post what I find.

Larry, so after you segregate the assets into alt payees account you are saying you don't treat them as is they are participant? Rarely do I have DC qdro that says anything about beneficiary.

In my area, the custom is the divorce attorneys draft the putative QDROs. The boilerplate circulating among those divorce attorneys specifies in the order that the AP's estate is the death beneficiary. The contrary situation to Janet's situation.

I review for several ERs the orders they receive to determine if they pass muster under IRC 414p and ERISA 206d3. To date it has not cropped up, but supposing that a particular plan document has default death beneficiaries listed by type and allows participants to specify a death beneficiary, what would the plan do with the benefits if the order found to be a QDRO specifies the AP's estate, the AP nonetheless submitted a specific death beneficiary designation other than the estate, and then dies with benefits remaining in the plan?

On the one hand, the AP has followed the plan's provisions, but by doing so has violated the court order by which the AP was awarded the benefits in the first place. The specification in the court order of a death beneficiary may presumably be a condition of the benefits being awarded. Is the attempted designation of someone other than the AP's estate invalid?

Is this a Db or a Dc plan?

Is the APs interest a separate account or shared account?

DC, separate account.

Janet -- As I stated, if the QDRO is silent then you follow plan terms--assuming, of course, the plan's terms include language relating to an alternate payee's beneficiary. I know that an alternate payee is considered a participant (says the DOL ) in some manner and for some purposes, but plans universally define a participant as being or having been an employee, and the beneficiary described in the plan usually is based upon death of a participant. An alternate payee, in that instance, might not be able to rely on the Plan's provisions regarding beneficiary. (Corbel, for example, discusses what impact a QDRO has on the (now former) spouse's status as a participant's beneficiary--looking to the QDRO in some instances--but does not say what happens at the death of an alternate payee.)

Besides, the QDRO isn't always silent about beneficiaries for an alternate payee. I've seen a DC QDRO--where the alternate payee could not receive payment until the participant retired or otherwise was entitled to a distribution--which provided that the participant would recapture the alternate payee's account if the alternate payee died before the participant was entitled to a distribution.

What to do if the plan provides that an alternate payee is a participant for purposes of beneficiary designation, but the alternate payee relies on the QDRO and designates no one--or, designates someone other than what the plan would provide, or designates someone other than what the QDRO or the Plan would provide? I would first look to the QDRO. But, as the Administrator, in tough situations with substantial $$, I think I'd file an interpleader--i.e., pay the account balance to the Court, file a lawsuit joining the appropriate parties (i.e., the potential beneficiaries), and let them duke it out . . .

While I didnt see any such statement in the OP and since some divorce lawyers still think that the AP can assign a surviving spouses' interest in a DB plan to heirs (I think Q made the assumption tha it was a dc plan with a separate interest), if this is in fact a separate interest in a DC plan then it is the property of the AP as beneficiary and payable to her estate or heirs as provided under the default provisions of the plan.

It is a DC plan with a separate account

What about a DB plan with a seperate interest QDRO that allows the AP to name a beneficiary? I know that the Shelstead court left the possibility open, but I haven't seen any definite authority one way or the other. AP died pre-distribution.

Does the plan permits an AP to designate a beneficiary for a separate benefit? As held in Boggs v. Boggs state law cannot require payment of a DB benefit to an hier of a ex spouse under a divorce decree if the plan does not allow a survivorship interest.

Thanks for the help, mjb. The plan is silent as to an AP designating a beneficiary. It doesn't pay any death benefits other than to a spouse in the case of the QPSA (or the J&S options for post-retirement distribution). I was thinking that the AP should be treated as a participant for purposes of the QPSA, with benefits payable to the new spouse?

If that isn't the case, is the AP's share of the benefit forfeited or does it revert to the participant? There is no reversionary language in the QDRO itself, the only language dealing with survivorship states: "The AP shall have the right to designate the beneficiary of any survivor benefits from the AP's interest payable after the AP's death."

The AP's rights are no greater than any other beneficiary. If there are no death benfits payable to the heirs of any non spouse then no death benefits can be paid to the AP's heirs. The AP would be entitited to surviving spouse benefits only if the QDRO provided for such benefits. But surviving spouse benfits terminate at the death of the spouse.

And what about the portion of the participant's accrued benefit that was carved out for the AP? If the QDRO is silent on the matter, would that revert to the participant or would the AP's portion of the benefit simply be forfeited? I appreciate the help.