Generate Pension Report Create Account Log In How It Works Online Demo Sample Report Download Pension Form Print Pension Form QDRO Request Forms FREE Download Book Basics of Pensions In Depth Analysis Special Issues Actuarial Standards Sample Authorizations Pension FAQs QDRO FAQs Glossary Join Our Mailing List About Our Company About Our Analysts Contact Us Phone Consultations Our Fee Schedule Testimony Your Privacy Security Terms of Use Customer Support	Types of Plans QDRO Issues under ERISA Defined Benefit Plans Defined benefit pension plans provide retirees with a predetermined monthly retirement benefit upon reaching a specific age. The retirement benefit paid to a retiree is typically calculated using a formula which often employs years of credited service under the plan and salary information. The retirement benefit is typically payable to the employee upon attainment of their normal retirement age for the remainder of his/her lifetime. Benefits under this type of plan are often referred to as accrued benefits. This type of plan does not maintain individual accounts for employees. It is important to remember that under this type of plan, the Alternate Payee is typically not awarded a lump sum cash payment from the Plan. It is usually a requirement of the Plan that the amount awarded to the Alternate Payee be expressed in terms of a monthly benefit payable for either the lifetime of the Participant or the Alternate Payee. When writing a QDRO for this type of Plan there are two approaches that may be followed: Shared Interest Approach: Under this type of QDRO, the Participant and the Alternate Payee "share" the benefit paid from the Plan. The Alternate Payee may not begin to receive benefits until the Participant actually retires and begins receiving benefits. The Plan will only pay the amount awarded to the Alternate Payee for the lifetime of the Participant. If it is the intention of the parties that the Alternate Payee receive benefits after the Participant's death, the Participant must elect a joint & survivor annuity upon his/her retirement and designate the Alternate Payee as the survivor annuitant for this benefit. There are three disadvantages for following this approach to dividing the benefits. The Alternate Payee cannot begin to receive benefits under the Plan until the Participant actually retires and begins receiving benefits. Therefore, if the Participant chooses not to retire, the Alternate Payee never receives the amounts awarded. By forcing the Participant to elect a joint & survivor annuity with his/her ex-spouse as the designated survivor annuitant, any subsequent spouse of the Participant could be left without any share of the Participant's benefits after his/her death. The joint & survivor annuity will reduce both parties' share of the benefits. Separate Interest Approach: Under this approach, the Alternate Payee and the Participant receive "separate" benefits. The Alternate Payee may begin receiving benefits, at his/her election, anytime after the Participant reaches earliest retirement age. The Plan may perform various actuarial adjustments to the Alternate Payee's benefit in order to convert it to an amount that may be paid to him/her for life. Therefore, after benefits commence, the death of the Participant will have no affect on payment to the Alternate Payee. There are three advantages for choosing this approach to dividing the benefits. The Alternate Payee does not have to wait for the Participant to retire to begin receiving benefits. The Participant does not have to make any choices that could jeopardize a new spouse in order to protect the interest of an ex-spouse. This separate interest approach provides more flexibility to both parties without a financial impact for either party. Whenever possible, Pension Appraisers, Inc. promotes and follows the Separate Interest Approach in the QDROs drafted by our analysts. Return to In Depth Analysis

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