We received a benefit commencement request from a plan participant for a rollover from DB plan to an IRA. The participant (husband) included a copy of a Separation Agreement from 1999 which indicated that the wife is entitled to Majuskas share of the pension. However, the benefit commencement application (from 2009) included a signed & notarized spousal consent from wife irrevocably consenting to husband's 100% rollover election.

What are the Plan's obligations with respect to payout to participant? Do the terms of the separation agreement necessitate a hold on benefits? Or does the 2009 spousal consent and acknowledgement take precedent over the terms of the 10 year old separation agreement? Any input is appreciated. Thanks.

Are the parties divorced? If the parties are still married why isnt the waiver of spousal rights valid under ERISA 205(c)?

Also retirement benefits under ERISA are usually divided under a DRO issued after the parties are divorced, not a separation agreement. A property settlement agreement can be a valid DRO if it is approved by a judge as part of a divorce decree or order. You need to check with a divorce lawyer to see if the parties can transfer property property under a DRO prior to a divorce being issued. The separation agreement may provide that the marital property will be divided when incorporated as part of a divorce decree.

If the parties are not divorced the question is whether the waiver of spousal rights is a forgery. You can:

1. ask the spouse come in and personally sign the wavier and a statement that the parties are not divorced in presence of the plan administrator and,

2. Ask for the attorney for the H to provide a letter stating that the parties are still legally married.

To my knowledge the parties are NOT divorced. It seems prudent, as you suggest, to have a signed document stating that the parties remain legally married. Thanks for your input.

In addition once in the IRA , under 408(d)(6), the IRA or portion may be transferred to the spouse under a Separation Agreement.


408(d)(6) TRANSFER OF ACCOUNT INCIDENT TO DIVORCE. --The transfer of an individual's interest in an individual retirement account or an individual retirement annuity to his spouse or former spouse under a divorce or separation instrument described in subparagraph (A) of section 71(b)(2) is not to be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest at the time of the transfer is to be treated as an individual retirement account of such spouse, and not of such individual. Thereafter such account or annuity for purposes of this subtitle is to be treated as maintained for the benefit of such spouse.