Form 25-4

This form must be used if the participant is already receiving payments and may also be used for par­ticipants who have not yet retired.

Caveat: No form or model QDRO should be used as a substitute for the knowledge necessary to divide a retirement benefit. Each plan has different requirements, so this form must be modified depending on the plan. Be very careful in drafting a qualified domestic relations order. It is advisable to get the help of an expert to prepare the order and to prequalify the qualified domestic relations order with the plan administrator before the order is signed by the judge. Approval by the plan does not mean that the QDRO was prepared in accordance with the decree or the negotiated division, but only that it meets the requirements for a QDRO under ERISA.

This form is designed to be used only for the preparation of an order dividing a defined benefit private retirement plan that is a qualified plan under ERISA. It is recommended that this order be signed at the same time as the decree to avoid complications and additional costs for the client.

Before drafting a defined benefit plan QDRO, it is essential to understand the difference between a shared-payment (shared-interest) QDRO and a separate-interest QDRO. These terms are widely used by plan administrators, model QDROs, and publications on QDROs. See the practice notes at section 25.46. This form is to divide a shared-interest defined benefit plan. For a form to divide a separate-interest plan, see form 25-3.

A QDRO may be used for the division of marital property, child support, spousal maintenance, or ali­mony. This model QDRO should be adjusted accordingly, depending on the purpose of the QDRO.

NOTICE: THIS DOCUMENT
CONTAINS SENSITIVE DATA

[Caption. See § 3 of the Introduction in volume 1 of this manual.]

Qualified Domestic Relations Order

[Private Retirement Plan—Defined Benefit—Shared-Interest]

IT IS HEREBY ORDERED:

1.Designation as QDRO

Effect of the Order as a Qualified Domestic Relations Order

This order shall be incorporated into and shall become an integral part of the [name of order] signed in this case as if recited verbatim in the decree. This order creates and recognizes the existence of an alternate payee’s right to receive a portion of the participant’s benefits payable under an employer- sponsored defined benefit pension plan that is qualified under section 401 of the Internal Revenue Code (the Code) and the Employee Retirement Income Security Act of 1974, as amended (ERISA). This order is intended to constitute a qualified domestic relations order (QDRO) under section 414(p) of the Code and section 206(d)(3) of ERISA.

This order is entered pursuant to the authority granted in the applicable domestic relations laws of Texas concerning [marital property rights/child sup­port/spousal maintenance/alimony/[specify combination]].

2.Plan Information

The Plan

The name of the plan to which this order applies is the [formal name of plan] (the “Plan”). Further, any successor plan to the Plan or any other plan(s) to which liability for provision of Participant’s benefits described below is incurred shall also be subject to the terms of this order. Any benefits accrued by Participant under a predecessor plan of the employer or any other defined benefit plan sponsored by Participant’s employer, where liability for benefits accrued under such predecessor plan or other defined benefit plan has been transferred to the Plan, shall also be subject to the terms of this order. Any changes in the plan administrator, plan sponsor, or name of the Plan shall not affect Alternate Payee’s rights as stipulated under this order.

3.Participant Information

Participant Information

Following is the identification and contact information of the participant (“Participant”):

Name:

Social Security number: See Addendum

Birth date: See Addendum

Address:

4.Alternate Payee Information

Alternate Payee Information

Following is the identification and contact information of the alternate payee (“Alternate Payee”):

Name:

Social Security number: See Addendum

Birth date: See Addendum

Address:

Alternate Payee is the [spouse/former spouse/child/dependent] of Participant.

Participant and Alternate Payee shall each have the duty to notify the Plan Administrator in writing of any changes in their mailing address subse­quent to the entry of this order.

The parties were married on [date of marriage], and they were divorced on [date of divorce].

The date of division of Participant’s benefit under the Plan is [date of division].

5.Definition of Terms

Definition of Terms

“QPSA” means a preretirement survivor annuity as provided under the terms of the Plan or otherwise as defined in section 417(c) of the Code.

“QJSA” means a qualified joint and survivor annuity as provided under the terms of the Plan or otherwise as defined in section 417(b) of the Code.

6.Division of Benefits

Division of Benefits

This order is a shared-interest QDRO, and the benefit shall be based on Participant’s life expectancy and form of payment.

6.A.Percentage

6.A.1.When Benefits Are All Community Property

This order awards, assigns, and grants to Alternate Payee an amount equal to [percent] percent of Participant’s monthly benefit payments under the Plan as of [date of division].

Alternate Payee [shall/shall not] receive a proportionate share of any cost-of-living adjustments (COLAs) or other economic improvements made to Participant’s benefits.

6.A.2.When Benefits Are Not All Community Property

This order awards, assigns, and grants to Alternate Payee an amount equal to [percent] percent of the community-property portion of Participant’s accrued benefit under the Plan as of [date of division]. The community-prop­erty portion is determined by a fraction, the numerator of which is the number of months of credited service earned between [date of marriage] and [date of division], and the denominator of which is the total number of months of credit service earned as of Participant’s date of retirement.

Alternate Payee [shall/shall not] receive a proportionate share of any cost-of-living adjustments (COLAs) or other economic improvements made to Participant’s benefits.

6.B.Dollar Figure

From the benefits otherwise payable to Participant each month, this order awards, assigns, and grants to Alternate Payee an amount equal to [num­ber] dollars ($[amount]) of the Participant’s monthly benefit payments under the Plan.

If allowed by the Plan, Alternate Payee [shall/shall not] receive a pro­portionate share of any cost-of-living adjustments (COLAs) or other economic improvements made to Participant’s benefits.

7.Preretirement/Postretirement Survivor Annuity

Survivor Annuity

Notwithstanding the language set forth above in this section, if Alternate Payee becomes entitled to a QPSA or QJSA under this order, Alternate Payee’s right to a share of Participant’s benefits shall be terminated as of the date of Participant’s death, and the preretirement or postretirement death benefit shall be payable to Alternate Payee in lieu of any other benefits to which Alternate Payee may be entitled under the terms of this order.

8.Temporary or Supplemental Benefits

Temporary or Supplemental Benefits

Alternate Payee [shall/shall not] be entitled to a proportionate share of any early retirement supplements, interim supplements, or temporary benefits that become payable to Participant that are not considered by the Plan Admin­istrator to be a part of Participant’s accrued benefit as set forth in the assign­ment section of this order.

9.Commencement Date and Form of Payment to Alternate Payee

Commencement Date and Form of Payment to Alternate Payee

Alternate Payee shall commence Alternate Payee’s share of the benefits when Participant commences Participant’s benefits. Alternate Payee will con­tinue to receive Alternate Payee’s share of the benefits until the earlier of Alternate Payee’s death or Participant’s death.

Alternate Payee’s assigned share of the benefits shall remain based on the life expectancy of Participant. If Participant predeceases Alternate Payee either before or after their benefit commencement date, Alternate Payee’s rights to the benefits assigned to Alternate Payee under the assignment section of this order shall cease as of the date of Participant’s death; however, Alter­nate Payee will become entitled to either a QPSA or a QJSA, as applicable.

Early Commencement

Should any early commencement reduction be necessary if Alternate Payee and Participant commence their benefits before Participant’s normal retirement date, they shall each bear their own respective proportional share of the reduction.

10.Death of Participant

Death of Participant

10.A.Preretirement Survivor Annuity

10.A.1.Alternate Payee Not Deemed Surviving Spouse

If Participant dies before commencing [his/her] benefits under the Plan, Alternate Payee shall not be deemed to be the surviving spouse of Participant for purposes of the QPSA.

10.A.2.Alternate Payee Deemed Surviving Spouse

If Participant dies before commencing [his/her] benefits under the Plan, Alternate Payee shall be deemed to be the surviving spouse of Participant for purposes of the preretirement survivor annuity, [in an amount equal to Alter­nate Payee’s assigned interest as set forth in the assignment section of this order/in an amount that is proportional to Alternate Payee’s share of the pen­sion benefit awarded/for any and all preretirement surviving spouse benefits], and any subsequent spouse of Participant shall not be treated as a surviving spouse of Participant for those purposes. For purposes of determining the eligi­bility for such surviving spouse benefits, Alternate Payee and Participant have satisfied the one-year marriage requirement in sections 401(a)(11) and 417(d) of the Code and as may be required under the provisions of the Plan. If the costs associated with providing this preretirement survivor annuity benefit are not fully subsidized by Participant’s employer, Participant must make an affir­mative election for such preretirement survivor annuity benefits coverage in a timely manner and in accordance with the employer’s election procedures. If Participant terminates [his/her] employment before retirement, Participant shall still be required to maintain the preretirement survivor coverage in place for the benefit of Alternate Payee. At all times, Participant shall do all things necessary to maintain the preretirement survivorship coverage that protects Alternate Payee’s benefits.

10.B.Postretirement Survivor Annuity Participant Already in Pay Status

If Participant predeceases Alternate Payee, Alternate Payee’s assigned benefit payments shall cease at that time unless otherwise provided by the form of payment Participant elected at commencement. Alternate Payee will receive a survivor annuity or other death benefits, after the assigned benefit payments cease, only if Participant’s form of payment and beneficiary elections provide for such benefits.

10.C.Postretirement Survivor Annuity for Participant Not in Pay Status

10.C.1.Alternate Payee Not Treated as Surviving Spouse

If Participant is not receiving a retirement benefit at the time the order is qualified, Alternate Payee will not be deemed to be the surviving spouse of Participant for purposes of receiving a portion of the QJSA.

10.C.2.Alternate Payee Designated Surviving Spouse

If Participant predeceases Alternate Payee after Participant’s date of retirement, Alternate Payee shall be deemed to be the surviving spouse of Par­ticipant for purposes of establishing Alternate Payee’s entitlement to receipt of this monthly postretirement survivor annuity, and any subsequent spouse of Participant shall not be treated as a surviving spouse of Participant for those purposes. For purposes of determining the eligibility for such surviving spouse benefits, Alternate Payee and Participant have satisfied the one-year marriage requirement as enumerated in sections 401(a)(11) and 417(d) of the Code and as may be required under the provisions of the Plan. On Participant’s retire­ment, Participant shall be required to elect Participant’s benefit in the form of a [percent] percent joint and survivor annuity.

11.Death of Alternate Payee

Death of Alternate Payee

If Alternate Payee predeceases Participant before or after Alternate Payee’s commencement of benefits, Alternate Payee’s portion of Participant’s benefits, as stipulated herein, shall [revert to Participant/inure to the Plan].

If Alternate Payee predeceases Participant before the commencement of Alternate Payee’s benefits, Alternate Payee’s share of Participant’s benefits shall become payable to Alternate Payee’s designated beneficiary(ies) or estate, but only to the extent permitted under the terms of the Plan. If the Plan does not permit Alternate Payee to designate a beneficiary, beneficiaries, or Alternate Payee’s estate for such purposes, Alternate Payee’s assigned share of the benefits shall [revert to Participant/inure to the Plan]. Should Alternate Payee predecease Participant after Alternate Payee’s benefit commencement date, such remaining benefits, if any, will be paid in accordance with the form of benefit elected by Alternate Payee.

12.Participant Constructive Trustee

Participant Constructive Trustee

If the Plan pays to Participant any benefits that are assigned to Alternate Payee pursuant to the terms of this order, Participant is designated a construc­tive trustee to the extent that Participant has received such benefit payments and shall immediately return, within three days of receipt by Participant, the amounts so received directly to the Plan.

13.Savings Clause

Savings Clause

This order is not intended and shall not be construed in such a manner as to require the Plan to—

1.provide any type or form of benefit or any option not otherwise provided under the Plan,

2.provide increased benefits (determined on the basis of actuarial value), or

3.require the payment of any benefits to Alternate Payee that are required to be paid to another alternate payee under another order that was pre­viously determined to be a QDRO.

14.Tax Treatment

Tax Treatment of Distribution

For purposes of sections 402(a) and 72 of the Internal Revenue Code, any Alternate Payee who is the spouse or former spouse of Participant shall be treated as the distributee of any distribution or payments made to Alternate Payee under the terms of this order and, as such, will be required to pay the appropriate income taxes on such distribution.

15.Continued Jurisdiction

Continued Qualified Status of Order and Continued Jurisdiction

It is the intention of the parties that this qualified domestic relations order continue to qualify as a qualified domestic relations order. The Court shall retain continuing jurisdiction over the parties and property to the extent necessary to render an amended or corrected domestic relations order for the payment of benefits to Alternate Payee.

16.Effect of Plan Termination

Effect of Plan Termination

If the Plan is terminated or partially terminated, whether on a voluntary or involuntary basis, Alternate Payee shall have the right to receive Alternate Payee’s assigned benefits in accordance with the terms of this qualified domes­tic relations order and the termination procedure of the Plan and, if applicable, the Pension Benefit Guaranty Corporation. Alternate Payee’s benefits shall also be guaranteed to the same extent in accordance with the Plan’s termina­tion rules and in the same ratio as Participant’s benefits are guaranteed.

17.Separate Property

Separate Property

The benefits payable to Alternate Payee pursuant to this order shall be the separate property of Alternate Payee, and Participant is hereby divested of all right, title, and interest in that property. The Plan benefits not assigned to Alternate Payee pursuant to this order shall be the separate property of Partici­pant, and Alternate Payee is hereby divested of all right, title, and interest in that property.

18.Documentation and Information

Documentation and Information

Participant shall sign and return, within three days of a written request from Alternate Payee, any and all documentation necessary for Alternate Payee to receive Alternate Payee’s benefits assigned to Alternate Payee in this order.

19.Application of the Order

Application of the Order

This order relates to the period that starts with the execution of this order by the Court and ends when all benefits assigned to Alternate Payee have been distributed, in full, from the trust or other funding vehicle of the Plan, in con­formity with the provisions of this order.

20.Conflict

Conflict

In the case of a conflict between the terms of this qualified domestic relations order and the terms of the Plan, the terms of the Plan will prevail.

SIGNED on ___________________________________.

   
JUDGE PRESIDING