Friday, August 12, 2016

IBEW LOCAL 332 PENSION TRUST A has its own community property definition and to hell with the state of California and ERISA

Explanation of community property in
pension benefits

California, ERISA, IBEW PENSION TRUST A

ERISA
Contributions to pensions during “economic partnership” are community property.

California
Contributions to pensions “during marriage before separation” are community property.
Lehman v Lehman (case # S062850).

IBEW LOCAL 332 PENSION TRUST A
The community property benefit under part A shall be calculated by multiplying the total benefit to Employee by a fraction.

Numerator is total years during marriage employee receives credit under plan A
Denominator is the total years employee receives credit under plan A
NOTE: There is no separation of “earnings during marriage”, a readily available number and a very important component of the state and ERISA definition of community property.

EXAMPLES
Electrician married during 10 years of pension enrollment with 30 years of total
 service credits and total pension benefits of $5000.

Plan community property is $5000 multiplied by .33
 (10yrs married/ 30yrs work) = $1,650

Spouse receives 50% of Plan community ($1650) =  $825/month QDRO Benefit

NOTE: Plan and California community property benefit calculations will always be different. The plan includes no provision for the “period of time” factor in community property. And plan includes all contributions, both community and separate, in the denominator of their formula.

Scenario #1  
Marriage was during the great recession and electrician
 worked only 30 hours per week.
Pension benefit for the 10 year marriage was $1,000

California community property value $1,000 Spouse QDRO benefit 50% = $500
Plan community property calculation $1,650. Spouse QDRO benefit 50% = $825
Spouse Windfall—and---Electrician Loss--$325
Scenario #2
Marriage was during the last ten years of work and electrician 
worked full time and overtime in a booming economy,
 benefit was $2,500.

California community property value $2,500 Spouse QDRO benefit of 50% =$1,250

Plan community property calculation $1,650
Spouse Plan QDRO  benefit of 50%= $825

Electrician Windfall—and---Spouse Loss $425

NOTE:
These calculations are for monthly payments. Ten years at $325
 equals $39,000.(#1 scenario)
All the benefits come from the employee account.

There will be 50 QDROs produced for every 100 participants
 assuming one marriage per member..

QDRO is a qualified domestic relations order that is approved only by a federal judge or the pension plan

Friday, June 10, 2016

SAMPLE OF LOCAL 6 QDRO

San Francisco IBEW LOCAL 6
Pension plan exerts.  
THE PENSION BENEFITS ARE BASED ONLY ON MONEY PUT IN THE PLAN DURING MARRIAGE or RELATIONSHIP.  
Looks to be following ERISA rules and not cheating either party of pension rights or money.

4. Period of Marriage or Domestic Partnership. The parties agree that the period of marriage or Domestic Partnership was:
Date of Marriage/Domestic Partnership::
Date of Separation:.  
For purposes of this QDRO:
a. If the Marriage or Domestic Partnership was on or before the 15th of a month, the parties will be considered married the entire month.
b. If the Marriage or Domestic Partnership occurred after the 15th of a month, the parties will not be considered married that month. 
Order also refers to a same-sex “Domestic Partner” under California law that qualifies as a dependent under the Internal Revenue Code, if applicable.) The parties understand that retroactive benefits are not paid for periods prior to the filing of a pension application except as is required by applicable law.
Once the Alternate Payee’s account is established, the Alternate Payee shall have total control over the Individual Account to the extent allowed by the Plan including the right to designate a beneficiary(ies) to receive benefits upon her death. Similarly, the Participant will have total control over his remaining benefits in the Plan. Alternate Payee will not have any right, title or interest in the Participant's remaining balance, including being designated as a beneficiary for any death or other benefits provided by the Plan (unless the Participant later designates the Alternate Payee as a beneficiary). Page 6 of 12 
PENSION PLAN. During the marriage (or Domestic Partnership), the Participant earned retirement benefits under the Northern California Electrical Workers (“NCEW”) Pension Plan that are considered community property of the parties. The parties agree that the spouse has a one-half share of the community portion of the Participant's pension. The parties agree that the Participant earned ____ Future Service Credits and ____ Prior Service Credits under the Pension Plan during the marriage (or Domestic Partnership). Thus, the total credits earned during the marriage or Domestic Partnership was . Alternate Payee is entitled to one-half of such credits, which equals _____. For purposes of this order, the value of such credits will be the benefit rate for the particular years when the credit was earned based on the value at the date of separation.
 
 This is not the whole QDRO.  I think the document is twelve pages. 

Had this been the 332 Pension Plan document in 2005 I would have saved $20,000 in court costs and $20,000 in pension losses up to this year.  But my court experience did prove that the time formula is not appropriate for the 332 pension.

I think my pension reps " brothers"  let me down in a big way!!!  How many other IBEW LOCAL 332 members and travelers were screwed.  Not to mention Spouses who thought the Plan was honest and looking out for them.  

IBEW LOCAL 332 PENSION "A" is not ERISA COMPLIANT

IBEW LOCAL 332 PENSION A
QDRO benefits formula

Notice that Plan B is ERISA compliant but Plan A
QDROs cheat either the electrician or the spouse
Plan Lawyer is the KRAW Legal Group
Head lawyer is George Kraw
Plan Administrator is United Administrative Services
Plan Manager is Judy Sargent
Plan is
IBEW LOCAL 332 PENSION
PLAN
I am a participant


Pension Trust A and B Benefits Formula
      1. The community benefit of Part A shall be calculated by multiplying the total benefit payable to employee by a fraction. The numerator of the fraction is the total years during the marriage for which Employee receives credit under Part A. The denominator is the total years for which Employee receives credit under Part A. This calculation shall be performed as of the date when benefit payments to the spouse begin, in accordance with the terms of the Pension Plan in effect at that time.
      2. The community Benefit under part B shall consist of all employer contributions earned be Employee during the marriage, plus net investment earnings credited to Employee's benefit account under terms of the Plan. The parties agree that as of December 31, 20__ the end of the most recent plan fiscal year for which information is available, Spouse's interest was $_________. Pursuant to this order the Spouse shall be entitled to receive that dollar amount plus pro rata share of net investment income until.......................

Note that ERISA requires division of benefits earned only during marriage ( “economic partnership”).
California requires division of benefits earned only “during marriage before separation”.

California and ERISA requirements worked on most existing pension plans when they were instituted. Our Plan is and exception. The “time rule” does not follow the newer law when used with the IBEW 332 pension PLAN A contribution formula which is much newer than the old pension system. NOTICE that plan B does not use the “time rule” but plan A does. “A” is the older Plan that should have been changed to comply, probably in 1984 with the ERISA updates.

I'll dissect the Plan A Formula.

Total benefit to be multiplied by the fraction below.

Numerator of fraction is total years during marriage benefits earned
Denominator of fraction total years employee received benefits.
                  (NOT JUST MARRIAGE TIME)

So here is the error. If you use “total years” in any part of the formula you are violating California and federal law which demands a calculation based during the economic partnership only.  The partnership concept is based on earning during a specific time period.  The Plan formula does not consider any specific time period.

Example: $5,000 total contribution during 30 years employment and
 5 years of marriage.

                  5 year marriage          
Fraction ------- =             equals multiplier of .17
                 30 yrs work

.17 X $5000 = $833 community property
 splitting  $ 833    50/50 = $417 spouse pension
                                                         
The Kicker.  First years  full time work was scarce, later
the rate of contributions increased and more working hours
existed.                                                                                
                                                                                
 First five years                         ERISA                  PLAN
                                                  mandate                formula
contributions         $500 total     $250 spouse      $417 Spouse

Last five years
contribution        $1000 total     $500 spouse      $417 Spouse

According to the ERISA formula both of the above Plan calculations are wrong. One shorts the electrician the other the spouse. All the pension comes from the electricians account.

IBEW LOCAL 332 Pension Trust "A" divorce settlement warning

Monday, September 10, 2012

The spouse half pension got bigger than the electrician half

THIS SHOULD MAKE YOU WONDER about our trustees.
The following is from the IBEW LOCAL 332 BENEFITS WEB PAGE.


The trustees offer a QDRO formula with a ton of warnings.



WHY DIDN’T THEY JUST COME UP WITH A PROPER QDRO????
The warnings are true because the Plan this was designed for is nothing like our plan.

The following is from the disclaimer included with the IBEW LOCAL 332

SAMPLE QDRO



5. Limited Purpose of Plan Review of Order. These Plans do not review marital

property settlements to determine whether they are fair or complete, or whether they comply with applicable state law. It is the responsibility of the parties to the divorce action and their attorneys, not the Plans, to ensure that community assets are identified and a fair division is accomplished under state law.



NOTE!!!! THE PLAN IS REQUIRED TO CHECK FOR ERISA VIOLATIONS. ONE ERISA REQUIREMENT: THE QDRO MUST MEET STATE COMMUNITY PROPERTY STANDARDS!!!!

When presented with a final order, the Plan looks only to see whether it contains language about retirement benefits which creates or recognizes the existence of an alternate payee's right to receive benefits payable by that Plan. Where such language is found, the Plan has a legal duty to determine whether or not the order is a QDRO under federal law, and to provide the notices described above. The Plan has no duty whatsoever with respect to a marital property settlement unless the court order manifests an intent to divide benefits payable by that Plan. If there is no clear statement of such intent, the Plan will assume that the parties chose not to divide the benefits payable by that Plan. In such circumstances the Plan takes no action and sends no notices. Subsequent benefit
payments to the participant will be made under the terms of the Plan, without notice to or
consent by the former spouse. Examples of orders that will not trigger a notice to the former spouse or other potential alternate payee(s) are:
a. Orders stating that the participant shall receive his or her entire
account under these Plans;
b. Orders omitting all reference to retirement benefits;
c. Orders describing the disposition of other pension benefits without
mentioning these Plans;
d. Orders stating that there is no community property to be divided;
e. Orders dissolving marriage without a formal property settlement.
6. Escrow for Determination Period. During the period while the court order is being
reviewed to determine if it is a QDRO, the Plan must segregate the amounts that may be payable
to the alternate payee in a separate account or in an escrow account. If the Plan determines

F. SAMPLE QDRO

The following sample QDRO language divides the community property portion of the benefits equally between both spouses. This sample language is provided as a courtesy. Please note that a 50-50 division is not legally required and does not necessarily accomplish the best result for either spouse.


NOTE; THIS LANGUAGE CAN GIVE THE EX-SPOUSE MORE THAN THE AMOUNT OF MONEY EARNED DURING THE MARRIAGE!!!!!

It also should be noted that the formula in paragraph 5 is the standard "Brown" formula
developed by the California courts and specifically approved by the California Supreme Court in Lehman v. Lehman, 98 Daily Journal D.A.R. 5539 (1998). That formula does not take

NOTE; “JACK LEHMAN WORKED FOR PG&E AND THE PG&E PENSION IS NOT THE SAME AS THE IBEW LOCAL 332 PENSION. THE SAME FORMULA DOES NOT WORK FOR BOTH PENSIONS.  THE COURT APPROVAL WAS FOR THE PG&E PENSION ONLY.

into account the possibility of different benefit accrual rates in different years. Employees
participating in these Plans will often NOT OFTEN BUT ALMOST ALWAYS accrue a different benefit amount each year, because of fluctuating employment in the construction industry and/or changes in the collectively-bargained contribution rate and/or changes in the applicable benefit formula.

Paragraph 5 also provides for calculation of the alternate payee's share under Part A at the time benefit payments begin. This approach does not allocate any share of subsequent, contingent benefit increases to the alternate payee. If the parties wish to treat such contingencies as community property and provide for their division in the order, they may do so


NOTE: THE PLAN ITSELF CALCULATED MY SPOUSES BENEFIT. THE RESULT WAS A $560 PENSION FROM A $245 BENEFIT!!!

AND THE TRUSTEES ARE STANDING BEHIND IT!!!

MY FIRST TRUSTEE APPROVED PENSION (before the first trial)

TOTAL BENEFIT $ 3,140

ELECTRICIAN BENEFIT $ 1,217

FIRST WIFE BENEFIT $ 560

SECOND WIFE BENEFIT $ 1,363

Note who got the largest share!!!!

My half was $ 1,217. The ex-spouse’s half was $1,923. Don’t you think the trustees might have double checked the numbers when I complained? There is no record of the plan ever doing a recheck!!

If you are a divorced electrician, getting ready to retire, GOOD LUCK.

Another comment: The plan itself calculated the benefits that are wrong in my pension. They used the plan SAMPLE QDRO, and proved it wrong just as they warn. However since the plan did the calculation and choose the method for my ex-spouse it is the plans responsibility to fix it. So far they refuse to live up to their fiduciary duty.

Happy Trails

Wednesday, September 5, 2012

FIDUCIARY DUTY and ERISA

The IBEW LOCAL 332 PENSION “A” trustees are the fiduciaries of the plan. Everything that happens on the administrative side and the legal side is the responsibility of the trustees and is guided by their fiduciary role.


ERISA requires them to look solely to the interests of the participants.

The Supreme Court defines their fiduciary responsibility through the words of Justice Cardozo in the case of Meinhard v. Salmon.













“DUTY OF FINEST LOYALTY”

This translates into loyalty between participants and the trustees. If an error is made that injures a electrician or beneficiary the trustees have promised to fix the error.

“Many forms of conduct permissible in a workaday world for those acting at arm’s length, are forbidden to those bound by fiduciary ties.”

Translation: Even if the lawyers recommend a dispute be ignored the trustees are obligated to do the right thing.

“A trustee is held to something stricter than the morals of the market place.”

Translation: What is good for an insurance company could well be a
breach of fiduciary duty for a trustee.

“Not honesty alone but a punctilio of an honor most sensitive, is then the standard of behavior.”

Punctilio: A minute detail of conduct in a ceremony or in observance of a code.

The trustee must be honest, trustworthy, beyond reproach in even the smallest detail that will affect any beneficiary.

“Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty….”

If the Plan explains their use of the “SAMPLE QDRO” as the easy and uniform way to save costs of administration, the explanation I got from one staff member, the court will come down rigidly on the side of fiduciary duty. The Plan should not be using the “SAMPLE QDRO” because it has injured this divorced participant and probably others.

Other stuff:

The 9th District Court of Appeals has an average 16.3 month back-log of pending cases. This case is presently at 17 months.

According to our Business Manager: Plan “A” has earned 6.94% this year and is headed to 7.5% for all of 2012. 6.94% times $386 million is $27million in earnings. Our deficit from the bad year is now only $46 million not counting inflation.

Actually I should be praising the business manager for giving us information not required by the government. However my suspicion is the trustees are less than open about our plan. For instance, what do you suppose a meeting of the trustees is like? Does it include a ham sandwich and a beer or a fillet and some Dom. When they voted to give me an anemic pension was the vote 8 to 0 or 4 to 4? Did anyone notice that the benefit awarded me was less than 50% of my earned contributions? Why do they recommend a SAMPLE QDRO based on a pension plan that is completely different than ours? How come the SAMPLE QDRO takes money from a non-married year of an electrician and moves it to a married year to give the ex-spouse more of a benefit? Why do the trustees proclaim Lehman v Lehman as the authority for our QDRO? Lehman reiterates many times that alt-payee benefits come from “years of marriage before separation” not all years of working.

Why is the Pension and Health and Welfare Committee report given as just a small part of the BM report? Plan “A” alone is over $400,000,000. Plan “B” probably more and medical is on top of all that.



Happy Trails





Sunday, August 26, 2012

HOW MANY DIVORCED ELECTRICIANS ARE BEING CHEATED?

 The Plan "SAMPLE QDRO" may cheat electricans and the trustees know it.  Perhaps they like it because if used carefully the "SAMPLE QDRO" can also cheat ex-spouses. 

Here is the tool for correcting the “SAMPLE PLAN QDRO”

The following formula was Qualified by the Plan in 1999 and is therefore available to everyone. This formula always gives the electrician his part of the community property while the plan “averaging time rule” can lower the electrician’s benefit if the marriage is early in his or her career (example below). If the marriage is at the end of the electricians career the Plan formula will increase the electrician’s benefit. Neither option should be approved by a real fiduciary.

Plan A approved 1999 QDRO formula:

A. Find the community portion of your benefit in three steps.
       1. Percentage of benefit that belongs to the community for first year of marriage.
     
         Total number of married months divided by 12 equals the percentage of benefit. Anniversary on     
         1st to 15th day of the monthe equals 100 percent, 16th day thru end of month equals zero
         for the month.

        2. Percentage of benefit for 2nd through next to last year of marriage:  the community
        portion equals 100 per cent.

        3. Percentage of benefit that belongs to the community for last year of marriage.

       Total number of non-separated months divided by 12 equals the percentage of community property   earned for this last year. If anniversary is before the 15th the whole month is community if after the 15th the whole month is not community property.  You can also take it down to the nats ass by using the days of marriage divided by the days of the month.  The plan QUALIFIED DRO did not go that deep.

 Shortcut formula: Find total benefits earned during marriage from plan documents and divide by two. Not the legal way but very close.  The Plan sends this number to you every year.


B. Alternate payee is acknowledged to have ownership interest in the plan benefits equivalent to one half the community property portion.


C. The above assumes the electrician has not in any way lost control of the plan benefits. i.e. traded pension for divorce or support settlement.


Copy of  formula qualified by Plan A in 1999 in my plan records.

.















Copy of earned benefits during marriage before separation in 1979.





















First Plan Calculation using SAMPLE QDRO gives spouse more than the total benefit earned during the marriage.  Spouse's legal share of community benefit $123, Plan allowance using sample QDRO $560.























Check out the difference in these documents. Total earned benefits during the marriage were $245. The Plan calculated spousal benefit was $560. According to the 1999 QDRO her real benefit should have been $123 (close to 50% of $245community). This is over $400 per month extra for the alternate payee. And: $400 per month less for the electrician.


Don’t you just feel warm and fuzzy having brothers on the board of trustees watching your back!!!. What could possibly go wrong????


Please ask a trustee what the hell they were thinking!!! The President and the Business Manager are two of the trustees with email.

 If you are a divorced electrician you could be next. The “SAMPLE PLAN QDRO” is a 50-50 gamble for divorced members.

Funny fact. The “sample QDRO” is really only a “sample DRO” until it is qualified by the trustees. 

Happy Trails