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Full Version: QDRO: Do APs benefit from COLAs
BenefitsLink Message Boards > Retirement Plans > Qualified Domestic Relations Orders (QDROs)
wwest
APs are in pay status. Most of the company QDROs have language that specify payment to AP for the Participant's employment years. COLA occurs after employment ends. Does AP's portion increase when P gets COLA?
GregSelf
I'm not sure I completely understand the question, but see if this helps. There is some language about "taking into account only the present value of benefits actually accrued" in Code Sec. 414(p)(4)(A). Also, ERISA Sec. 206(d)(3)(D) says that a domestic relations order is a qualifited domestic relations order only if such order "does not require the plan to provide increased benefits (determined on the basis of actuarial value)".
QDROphile
Depends on what the QDRO says and possibly what the interpretation policies are, as set forth in the plan's written QDRO procedures. Generally, if a QDRO awards an alternate payee a portion of the benefits accrued during a period and the plan upgrades the benefits accrued during the period, the alternate payee's portion of the benefits would be upgraded unless the QDRO provides otherwise. If an alternate payee is awarded a percentage of each benefit payment rather than a portion of the accrued benefit, you get a similar result. But it is ultimately a matter of interpreting the plan and the QDRO.
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