IBEW LOCAL 332 PENSION PLAN "A"
Error #10 The state of California revised its original DRO and the Plan once again Qualified it even though it still contains overpayment to wife #1 and causes underpayments to participant. Participant community property rights have yet to be completely corrected. 29 USC 1056(d)(3)(B)(ii)(II)
This is the same old story from error #9. The Plan made the same error twice although a year apart. After the state superior court lowered the original benefit to wife #1, but not enough to restore the electricians benefit to 50% of the community property amount demanded by the state of California. This adds an ERISA twist to the works. According to the Erisa law sited above: the plan must not qualify any DRO (domestic relations order) that shorts the participant. So: the state may make an exception (or error) but it is not allowed to be qualified by the Plan. As I mentioned in last weeks edition the Plan did not seem to know this. Otherwise they would have told the Federal judge, in our last hearing, that the Plan is the organization that qualifies a DRO. Rather, they told the judge the state qualifies DROs.
Here are some things that have caused me to chip my teeth and scratch my head.
The government demands that fiduciaries be open and solely looking out for the participant (electrician in Plan A). Is this regulation because of Plans like ours that refuse to be cooperative. They flat out stone-walled me after their third answer was shown to be as wrong as their first two. ( See blog about case law mandating “time rule”). Their idea of “time rule” was later reversed by the court. (This is an “I told you so.)
In Plan A: if an electrician asks for reimbursement and the Plan refuses he can then ask for a hearing. In my case the Plan had a reason for refusing a hearing, I think it was due to some procedure they deemed incorrect, I’m still not sure. But: why would they be so picky? I’m the customer with a problem, they are the bank with my money, why not get together and discuss the problem. At this time, as a card carrying paranoid electrician, I wondered if the administration was giving my request to the board. So I delivered my appeal by hand to most of the trustees. They did not like this move and admonished me for the delivery method. From now on every thing is to go threw the administrator. It was a lot of work finding addresses, delivering and finding out who the trustees were at the time. Heck, two of the labor trustees lived way out of Santa Clara county.
A short outline of our Pension plan. The trustees sit at the top of the pyramid. Below them is United Administrative Services doing the accounting work. Kraw & Kraw making the legal decisions. The actuary figuring out the money needed to fund pensions for lifetimes. And, investment advisors. Members are told to take their problems to UAS. I did that. UAS sent me to K&K due to my legal questions. K&K tried to cover their behind with case law that the superior court later rejected and then stopped responding.. Now, like 99% of the legal profession, K is trying to get me to give up through legal maneuvers.
Participant has a right to all Plan participant records. The court has ruled that means all records pertaining to the participant. I asked the Plan is they had complied. They answered that I could have all the records in the UAS files. A bad thing to say to a paranoid electrician. The rules put no restriction on the location of the files. What about any files at Kraw & Kraw? The Plan answer: my rights are only to the files at UAS.
Of course there may be attorney client privilege? No there is no privilege for attorney
Client communication because of the fiduciary responsibility to the participant. The electrician is allowed to see virtually all of the communications between all parties of the fiduciary relationship because they are all working toward the best interests of the participant.
Another point in the direction of cooperation. If I am correct and the Plan is shorting spouses of divorced electricians, then fixing it now is cheaper than fixing it in the future. And if I am wrong and the Plan is shorting electricians, it is even better to fix it sooner. Can you really trust someone who would bend the rules to help one person at the expense of another. Do you really want to be a party to this kind of arrogance.
Another week and still no answer from the trustees to the following:
1. What specific policy forbids participants from seeing Plan minutes?
2. Why is the Plan still publishing a “Sample QDRO” the court has found
unacceptable.
Cowboy Humor
The only way to drive cattle fast is slowly.
Happy Trails
Saturday, February 18, 2012
Friday, February 10, 2012
PENSION PLANS put the "Q" on QDRO
IBEW LOCAL 332 PENSION PLAN A
Error #9 After the state of California approved the domestic relations order the Plan Qualified it with all the above errors. ERISA has mandated the plan not qualify DROs containing overpayments and extra benefits.
29 USC 1056(d)(3)(D)
This is a procedure the Trustees seemed to know nothing about. Their delegate to the last court hearing denied it existed to the judge. The only recourse for the electrician is this ERISA requirement. If the Plan screws up and will not back down, the only alternative for the electrician is Federal Court. A federal judge and The Plan are the only ones who can qualify a domestic relations order. Our Plan thought at the last hearing the state was the qualifier. WRONG, WRONG, WRONG!! According to ERISA, if the Plan and the electrician do not agree on the terms of a DRO, a federal judge is to make the final decision. Did you notice that it is the Plan and electrician who must agree, the spouse must wait for the decision before taking action.
By the way:
I wonder if the Plan has jumped in and done things the wrong way before? Most of us expect the Plan to be the experts because they are supposed to be the experts. You can lead a trustee to the dictionary but you can’t make him read the definition of fiduciary.
If the court accepts this case it will be another proof of the old adage: If you don’t do it right the first time you will have plenty of time to do it correctly the second time.
The trustees (who don’t seem to act unless motivated by federal rules) are not only protecting your $362,000,000 of Plan A money but also the $335,000,000 in Plan B. Lets hope they do a good job, my retired retail clerk friend is looking forward to cuts in his pension due to the non-union growth of Wal-mart and others.
Still no response from the trustees concerning the “policy” of closed minutes or the reason the sample QDRO (really it’s a DRO) has not been corrected (or why they think it is correct). The trustees have paid Kraw & Kraw $80K a year for the last two years. Perhaps Kraw could throw in an answer just for customer relations sake.
Cowboy wisdom.
No matter where you ride to, that’s where you are.
Happy trails
Error #9 After the state of California approved the domestic relations order the Plan Qualified it with all the above errors. ERISA has mandated the plan not qualify DROs containing overpayments and extra benefits.
29 USC 1056(d)(3)(D)
This is a procedure the Trustees seemed to know nothing about. Their delegate to the last court hearing denied it existed to the judge. The only recourse for the electrician is this ERISA requirement. If the Plan screws up and will not back down, the only alternative for the electrician is Federal Court. A federal judge and The Plan are the only ones who can qualify a domestic relations order. Our Plan thought at the last hearing the state was the qualifier. WRONG, WRONG, WRONG!! According to ERISA, if the Plan and the electrician do not agree on the terms of a DRO, a federal judge is to make the final decision. Did you notice that it is the Plan and electrician who must agree, the spouse must wait for the decision before taking action.
By the way:
I wonder if the Plan has jumped in and done things the wrong way before? Most of us expect the Plan to be the experts because they are supposed to be the experts. You can lead a trustee to the dictionary but you can’t make him read the definition of fiduciary.
If the court accepts this case it will be another proof of the old adage: If you don’t do it right the first time you will have plenty of time to do it correctly the second time.
The trustees (who don’t seem to act unless motivated by federal rules) are not only protecting your $362,000,000 of Plan A money but also the $335,000,000 in Plan B. Lets hope they do a good job, my retired retail clerk friend is looking forward to cuts in his pension due to the non-union growth of Wal-mart and others.
Still no response from the trustees concerning the “policy” of closed minutes or the reason the sample QDRO (really it’s a DRO) has not been corrected (or why they think it is correct). The trustees have paid Kraw & Kraw $80K a year for the last two years. Perhaps Kraw could throw in an answer just for customer relations sake.
Cowboy wisdom.
No matter where you ride to, that’s where you are.
Happy trails
Friday, February 3, 2012
PENSION PLAN's DRO ERROR #8
Error #8: The Plan violated ERISA and California Community property law by giving credit to wife #1 for benefits earned by participant after the marriage. Actors Guild v Tise and Plan accounting of wife #1.
This error goes back to the Plan concept that averaging all benefit years together is a fair way to determine spousal benefits. Using their averaging (also known as “time rule”)concept my second spouse’s benefit decreased by half and the first spousal benefit more than doubled.
Another way to look at it:
Marriage #1 ended in 1979 and she gets credit because of the "averaging formula"
for the electricians earnings through 1996.
Marriage #2 started in 1980 and she gets a deduction from her accrued benefit
until the divorce in 1998.
Who is this calculation helping the most? Is it anybodies definition of fair?
Here is my same old answer:
The Plan sites the case of Lehman v Lehman in which the Lehman’s benefits were
averaged by the court. However the Lehman (P.G.&E.) pension plan granted the
same benefit for each year of employee work so averaging did not change the benefit amount accrued by either spouses or participant. The “time rule” did not change their benefit. The IBEW LOCAL 332 PENSION PLAN A has different benefit for each year of work and therefore averaging will change the total amount of benefit. Because benefits have increased over the years, a 1996 benefit is worth way more than a 1980 benefit. Using the plan “time rule” spouse number one gets the
advantage of the higher benefits after the divorce and also does not share any additional benefits earned for herself after the marriage. However wife #2 has her earned benefit reduced by the amount shared with spouse #1. This is a violation of ERISA 29 USC 1056(d)(3)(D).
“A domestic relations order meets the requirements of this subparagraph only if such
order--
(i) does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan,
(ii) does not require the plan to provide increased benefits (determined on the
basis of actuarial value),
(iii) does not require the payment of benefits to an alternate payee which are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order.”
Comments:
(i) SPD does not allow benefits to move from alt-payee to alt-payee.
(ii) SPD does not allow for increased benefits
(iii) Plan rules do not allow payments to one payee which are required to be paid another payee.
AND, according to the Plan sited case law of “LEHMAN’: Alt-payees can only earn benefits “DURING THE TERM OF THE MARRIAGE” Not for years after the marriage using the “time rule formula”. This concept was confirmed by the state court in “Gray v Gray”.
Notes and stuff:
Still no court ruling on my appeal, the case was to be heard by a panel of three judges in December and the results posted in January. So: results should be posted any day now.
I sent a letter to the trustees (December) asking for a more details on the policy that limits participant looks into the minutes. It does not seem like an answer from them is forthcoming being this is February. Their stated reason for the turndown was “policy”. Compare that to telling your neighbor not to replace his 15-amp circuit breakers with 50-amp breakers because of the NEC. True, but a very very broad and all including reason that is really a non-answer.
I also asked them why the Plan sample QDRO has not been changed since 2009 when the California Superior court shot down some of its provisions. No answer on that either. But, the letter does require them to admit knowledge of something that should be fixed if they are questioned in the future.
Cowboy Wisdom:
“Why should I obtain something by force that which I can obtain by cheating?”
Doc Holiday
Happy Trails
This error goes back to the Plan concept that averaging all benefit years together is a fair way to determine spousal benefits. Using their averaging (also known as “time rule”)concept my second spouse’s benefit decreased by half and the first spousal benefit more than doubled.
Another way to look at it:
Marriage #1 ended in 1979 and she gets credit because of the "averaging formula"
for the electricians earnings through 1996.
Marriage #2 started in 1980 and she gets a deduction from her accrued benefit
until the divorce in 1998.
Who is this calculation helping the most? Is it anybodies definition of fair?
Here is my same old answer:
The Plan sites the case of Lehman v Lehman in which the Lehman’s benefits were
averaged by the court. However the Lehman (P.G.&E.) pension plan granted the
same benefit for each year of employee work so averaging did not change the benefit amount accrued by either spouses or participant. The “time rule” did not change their benefit. The IBEW LOCAL 332 PENSION PLAN A has different benefit for each year of work and therefore averaging will change the total amount of benefit. Because benefits have increased over the years, a 1996 benefit is worth way more than a 1980 benefit. Using the plan “time rule” spouse number one gets the
advantage of the higher benefits after the divorce and also does not share any additional benefits earned for herself after the marriage. However wife #2 has her earned benefit reduced by the amount shared with spouse #1. This is a violation of ERISA 29 USC 1056(d)(3)(D).
“A domestic relations order meets the requirements of this subparagraph only if such
order--
(i) does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan,
(ii) does not require the plan to provide increased benefits (determined on the
basis of actuarial value),
(iii) does not require the payment of benefits to an alternate payee which are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order.”
Comments:
(i) SPD does not allow benefits to move from alt-payee to alt-payee.
(ii) SPD does not allow for increased benefits
(iii) Plan rules do not allow payments to one payee which are required to be paid another payee.
AND, according to the Plan sited case law of “LEHMAN’: Alt-payees can only earn benefits “DURING THE TERM OF THE MARRIAGE” Not for years after the marriage using the “time rule formula”. This concept was confirmed by the state court in “Gray v Gray”.
Notes and stuff:
Still no court ruling on my appeal, the case was to be heard by a panel of three judges in December and the results posted in January. So: results should be posted any day now.
I sent a letter to the trustees (December) asking for a more details on the policy that limits participant looks into the minutes. It does not seem like an answer from them is forthcoming being this is February. Their stated reason for the turndown was “policy”. Compare that to telling your neighbor not to replace his 15-amp circuit breakers with 50-amp breakers because of the NEC. True, but a very very broad and all including reason that is really a non-answer.
I also asked them why the Plan sample QDRO has not been changed since 2009 when the California Superior court shot down some of its provisions. No answer on that either. But, the letter does require them to admit knowledge of something that should be fixed if they are questioned in the future.
Cowboy Wisdom:
“Why should I obtain something by force that which I can obtain by cheating?”
Doc Holiday
Happy Trails
Friday, January 27, 2012
IBEW LOCAL 332 PENSION PLAN A---------------FIDUCIARY ERROR
Error #7
The plan has no accounting for the participant benefit. Therefore they lacked the diligence required by their fiduciary role to protect participant.
One of the most important duties of our Pension Trustee’s is their fiduciary obligation. Congress has instructed trustees to act as if the plan Participant is the sole reason for their responsibilities. That is a high bar to set. The trustees are obligated to put the participants before even themselves in the performance of their duties. I personally think those instructions mean that participants (electricians) are more important than the other beneficiaries (spouses, etc.).
So why is it that the trustees failed to check on what my benefit should total? I don’t have the answer but it is obvious they forgot about the congressional instructions in the ERISA documents.
The records show a ("Brown") formula for wife #2 (although its wrong) and two formulas for wife number #1 (both also wrong) but no calculation for the electrician. So: why would they be so confident the spousal support was right without some kind of comparison with the SPD (Summary Plan Document) to make sure the electrician’s benefit was correct. The answer I’m sure is very complicated, the truth is only known to the trustees. They have been unwilling to share with the rest of us for about five years. That is an outrage coming from a organization that is supposed to be totally open and above suspicion.
Here are some facts:
A. Wife #2 has a “BROWN FORMULA” calculation in the file that is wrong and a waste of time for the plan to even work out. (She was paid by this formula until they sent her $25,000 in reimbursements.) She already had a QDRO in the file that specified her benefit. The Plan received it in 1999 and Qualified it as correct and acceptable.
B. In about 1999 I asked the Plan (Sarah Kraw) if the QDRO would affect my benefit. The answer was “NO” the electrician benefit would always be at least 50% of the total accrued pension.
C. Wife #1 has two calculations in the file. One shows her benefit when coordinated with wife #2s 1999 QDRO according to the Plan rules. The second calculation for wife #1 shows her benefit when figured using the Plan’s “BROWN FORMULA” which was later shot down by the California Superior Court of Appeals at my expense. (This one they used and it doubled her pension.)
D. Add my two spousal “BROWN FORMULA” calculations together and a very interesting fact emerges. The total of spousal support is less than it should be! (This is The Plan recommended standard operating procedure.) Therefore my benefit should rise.
E. The TRUSTEES refused to give me a hearing, as required, when I appealed their denial of restitution for my expenses. Check out the appeals process in the SPD, you should be able to get a hearing for a stubbed toe on the way to sign your papers because the policy is so very liberal.
Here are some speculations:
Could it be that the Plan was taking ERISA intent overboard and really meant to pay this electrician more than he deserved? Could it be that the 1999 QDRO opened up a bigger can of worms than any of us dreamed of. Could there be a bunch of divorced electricians who owe their spouses additional benefits? What about “FIDUCIARY RESPONSIBILITY” of our trustees?
DON’T YOU THINK THERE SHOULD BE AN EXPLANATION FOR THIS B/S.
The rest of their errors will follow, I think there are twelve in total but each day a little more comes to light. Four of these people are our brothers who ought to “own up” to what goes on at those trustee meetings. $380,000,000 in their hands and we know squat about it. Like should our IBEW Plan really invest in Walmart, Haliburton, B.P. and who knows what else. Are those foreign country investments good for the US and labor? Are we feathering our beds but kissing off our principles?
Miscellaneous:
The Trustees have refused my request to look at minutes from the 1970s. It is not their policy to allow participants to see minutes and besides there is no Federal law that requires them to do so. They did not explain or site a reason for the policy and if there in no Federal restriction the fed's must not disapprove. An open organization should be cooperative just to prove they are above reproach.
Its also been a couple of months since I asked the trustees why the SAMPLE QDRO is the same as it was before the California Superior Court dissed it in the "GRAY V GRAY" case of 2005.
I think they had a meeting this Thursday so perhaps my answer is in the mail.
Do you think the business manager (trustee)will start his three part explanation announced at the November meeting concerning the pensions and the medical plans. The first segment was due in December.
Cowboy Wisdom
The easiest way to eat crow is while its still warm, the colder it gets the harder it is to swaller
Happy Trails.
The plan has no accounting for the participant benefit. Therefore they lacked the diligence required by their fiduciary role to protect participant.
One of the most important duties of our Pension Trustee’s is their fiduciary obligation. Congress has instructed trustees to act as if the plan Participant is the sole reason for their responsibilities. That is a high bar to set. The trustees are obligated to put the participants before even themselves in the performance of their duties. I personally think those instructions mean that participants (electricians) are more important than the other beneficiaries (spouses, etc.).
So why is it that the trustees failed to check on what my benefit should total? I don’t have the answer but it is obvious they forgot about the congressional instructions in the ERISA documents.
The records show a ("Brown") formula for wife #2 (although its wrong) and two formulas for wife number #1 (both also wrong) but no calculation for the electrician. So: why would they be so confident the spousal support was right without some kind of comparison with the SPD (Summary Plan Document) to make sure the electrician’s benefit was correct. The answer I’m sure is very complicated, the truth is only known to the trustees. They have been unwilling to share with the rest of us for about five years. That is an outrage coming from a organization that is supposed to be totally open and above suspicion.
Here are some facts:
A. Wife #2 has a “BROWN FORMULA” calculation in the file that is wrong and a waste of time for the plan to even work out. (She was paid by this formula until they sent her $25,000 in reimbursements.) She already had a QDRO in the file that specified her benefit. The Plan received it in 1999 and Qualified it as correct and acceptable.
B. In about 1999 I asked the Plan (Sarah Kraw) if the QDRO would affect my benefit. The answer was “NO” the electrician benefit would always be at least 50% of the total accrued pension.
C. Wife #1 has two calculations in the file. One shows her benefit when coordinated with wife #2s 1999 QDRO according to the Plan rules. The second calculation for wife #1 shows her benefit when figured using the Plan’s “BROWN FORMULA” which was later shot down by the California Superior Court of Appeals at my expense. (This one they used and it doubled her pension.)
D. Add my two spousal “BROWN FORMULA” calculations together and a very interesting fact emerges. The total of spousal support is less than it should be! (This is The Plan recommended standard operating procedure.) Therefore my benefit should rise.
E. The TRUSTEES refused to give me a hearing, as required, when I appealed their denial of restitution for my expenses. Check out the appeals process in the SPD, you should be able to get a hearing for a stubbed toe on the way to sign your papers because the policy is so very liberal.
Here are some speculations:
Could it be that the Plan was taking ERISA intent overboard and really meant to pay this electrician more than he deserved? Could it be that the 1999 QDRO opened up a bigger can of worms than any of us dreamed of. Could there be a bunch of divorced electricians who owe their spouses additional benefits? What about “FIDUCIARY RESPONSIBILITY” of our trustees?
DON’T YOU THINK THERE SHOULD BE AN EXPLANATION FOR THIS B/S.
The rest of their errors will follow, I think there are twelve in total but each day a little more comes to light. Four of these people are our brothers who ought to “own up” to what goes on at those trustee meetings. $380,000,000 in their hands and we know squat about it. Like should our IBEW Plan really invest in Walmart, Haliburton, B.P. and who knows what else. Are those foreign country investments good for the US and labor? Are we feathering our beds but kissing off our principles?
Miscellaneous:
The Trustees have refused my request to look at minutes from the 1970s. It is not their policy to allow participants to see minutes and besides there is no Federal law that requires them to do so. They did not explain or site a reason for the policy and if there in no Federal restriction the fed's must not disapprove. An open organization should be cooperative just to prove they are above reproach.
Its also been a couple of months since I asked the trustees why the SAMPLE QDRO is the same as it was before the California Superior Court dissed it in the "GRAY V GRAY" case of 2005.
I think they had a meeting this Thursday so perhaps my answer is in the mail.
Do you think the business manager (trustee)will start his three part explanation announced at the November meeting concerning the pensions and the medical plans. The first segment was due in December.
Cowboy Wisdom
The easiest way to eat crow is while its still warm, the colder it gets the harder it is to swaller
Happy Trails.
Wednesday, January 18, 2012
IBEW LOCAL 332 PENSION TRUST QDRO errors
Error # 1 Under paid spousal benefits
Error # 2 Incorrect DRO and QDRO
Error # 3 No QDRO coordination
Error #4 Plan authored DRO of 2005 increased benefits for first wife’s past service credit from $10 per year to $37 per year. Overage lowered participants benefit. Violation of 29 USC 1056(d)(3)(D) which allows no increased benefits greater than the pension allows in the “Summary Plan document“. The SPD is very specific: $10 is the maximum allowed for “past service credit”
Error #5 Plan 2005 DRO increased total of first wife’s benefit to more than the total contributions of the marriage. Violation of ERISA 29USC 1056(d)(3)(D)(i)&(ii) and state case law Lehman v Lehman. Justice Mosk in the Lehman opinion states five times that retirement earnings are only accrued “during the term of the marriage”. Taking money from “wife-two” and giving it to “wife-one” is not proper.
Error #6 The 2005 DRO lowered the remaining account balance below the community property benefit California requires for participant. ERISA 29 USC 1056(d)(3)(B)(ii)(II) requires the Plan not qualify any DRO that does not meet community property law. And, taking money from the electrician and giving it to “wife-one” is not smart because the electrician watches that figure.
Total account balance minus “1999 QDRO” and minus “ 2005 DRO” must leave the proper community property share to the electrician. That share should equal: one half of all the benefits earned during all marriages plus the total of benefits earned during all non-married times.
Perhaps the Plan did not look at the title of the document (ERISA) they incorporated into the Trust Document on August 1, 1980. The "Employee Retirement Income Security Act" is for the protection of the EMPLOYEE. Congress did make provision in ERISA for other beneficiaries but the emphasis was on the employee.
Cowboy Wisdom
Never take to sawing on the branch that supports you, unless you’re hanging from it.
Happy Trails
Error # 2 Incorrect DRO and QDRO
Error # 3 No QDRO coordination
Error #4 Plan authored DRO of 2005 increased benefits for first wife’s past service credit from $10 per year to $37 per year. Overage lowered participants benefit. Violation of 29 USC 1056(d)(3)(D) which allows no increased benefits greater than the pension allows in the “Summary Plan document“. The SPD is very specific: $10 is the maximum allowed for “past service credit”
Error #5 Plan 2005 DRO increased total of first wife’s benefit to more than the total contributions of the marriage. Violation of ERISA 29USC 1056(d)(3)(D)(i)&(ii) and state case law Lehman v Lehman. Justice Mosk in the Lehman opinion states five times that retirement earnings are only accrued “during the term of the marriage”. Taking money from “wife-two” and giving it to “wife-one” is not proper.
Error #6 The 2005 DRO lowered the remaining account balance below the community property benefit California requires for participant. ERISA 29 USC 1056(d)(3)(B)(ii)(II) requires the Plan not qualify any DRO that does not meet community property law. And, taking money from the electrician and giving it to “wife-one” is not smart because the electrician watches that figure.
Total account balance minus “1999 QDRO” and minus “ 2005 DRO” must leave the proper community property share to the electrician. That share should equal: one half of all the benefits earned during all marriages plus the total of benefits earned during all non-married times.
Perhaps the Plan did not look at the title of the document (ERISA) they incorporated into the Trust Document on August 1, 1980. The "Employee Retirement Income Security Act" is for the protection of the EMPLOYEE. Congress did make provision in ERISA for other beneficiaries but the emphasis was on the employee.
Cowboy Wisdom
Never take to sawing on the branch that supports you, unless you’re hanging from it.
Happy Trails
Tuesday, January 10, 2012
IBEW LOCAL 332 PENSION PLAN A DRO ERRORS
Error # 1 Under paid spousal benefits
Error # 2 Incorrect DRO and QDRO
Error # 3 No QDRO coordination
The Plan broke its own rule about coordinating qualified domestic relations orders. (QDROs).
The Plan requires ex-spouse QDROs to be coordinated. (See benefits web site.) My records contain two QDROs: first was dated 1999 (marriage ending in 1996) and the second dated 2005 (marriage ending in 1980.
The Plan authored the 2005 DRO without coordinating it with the first DRO. The 1999 QDRO uses the half of total benefit for each individual year of marriage and the Plan used the averaging method for all years of contributions. Under the Plan method of averaging the ex-spouse with the highest marital earnings normally takes a reduction in benefit (in this case 50%). Because the first Plan qualified DRO (QDRO) is deemed the standard method of benefit division (coordination) the second spouse, who was timely with her QDRO, could not be forced to take the 50% lower benefit. (Its not a fair deal anyway.) Therefore the plan reduced the electrician benefit by the amount necessary to balance the total benefits with the account allocation. However, it is usually wrong to pay the electrician less than half the total earned benefit and it is wrong in this case. Evidently the plan is very stubborn about not paying more than is allowed by the account deposits. And not so stubborn about making sure each beneficiary gets their proper benefit. If all the spouses who have been shorted benefits (as it seems they have) find out, the Plan will have a hell of a expensive mess to clean up. The Plan could have almost 700 divorced electrician benefits to check out.
ERISA does not allow the Plan to QUALIFY any DRO that increases payments to the ex-spouse above those specified in the Summary Plan Document. 29USC 1056(d)(3)(D). Therefore, allowing this ex-spouse $37 per year for “past service” benefits is a big error. The plan maximum for her is $10 per year. She had eight years of credit ($80) but was awarded $296. That equates to $216 deduction from the electricians benefit. ($296 - $80 = $216.) Her “future service” credit was also increased due to the Plan “averaging” concept that was unacceptable to the appeals court. Averaging in this case (past and future credits combined) gives the first spouse a $437 per month windfall.
Do the trustees really think the original intent of this pension plan was to short the electrician's benefit in order to pay spouses additional money. The promise of the Plan in 1972 was that spouses would not be able to receive more than half the earned benefits. And ERISA (which is part of the pension trust agreement) demands that all spouses be paid correctly. The Plans "AVERAGING" method will always unfairly pay one of multiple spouses because it moves money from marriage to marriage.
BOTTOM LINE
Spouse total earned credit based on Summary Plan Document was $124.
Spouse earned credit based on Plan’s 2005 averaging concept $561.
Original extra amount awarded spouse at the expense of electrician $437 per month. ( $561 - $124 = $437)
Fact: The Plan averaging system caused me to have a negative balance from my past service years.
Plan qualification of 1999 DRO is their admission that it is correct and ALSO PROOF of error in the qualification of the 2005 DRO. The author of the 1999 DRO is a long time recognized California QDRO expert Barbara DiFranza.
The Plan erred by improperly qualifying both of my first wifes DROS. The first do to the above explanation and the second because it also reduces the electrician benefit to less than that required by the Community property laws of the state of California. (A federal law mandate the plan has accepted as an ERISA governed pension plan.)
Cowboy Wisdom
Timing has a lot to do with the outcome of a rain dance.
HAPPY TRAILS
Error # 2 Incorrect DRO and QDRO
Error # 3 No QDRO coordination
The Plan broke its own rule about coordinating qualified domestic relations orders. (QDROs).
The Plan requires ex-spouse QDROs to be coordinated. (See benefits web site.) My records contain two QDROs: first was dated 1999 (marriage ending in 1996) and the second dated 2005 (marriage ending in 1980.
The Plan authored the 2005 DRO without coordinating it with the first DRO. The 1999 QDRO uses the half of total benefit for each individual year of marriage and the Plan used the averaging method for all years of contributions. Under the Plan method of averaging the ex-spouse with the highest marital earnings normally takes a reduction in benefit (in this case 50%). Because the first Plan qualified DRO (QDRO) is deemed the standard method of benefit division (coordination) the second spouse, who was timely with her QDRO, could not be forced to take the 50% lower benefit. (Its not a fair deal anyway.) Therefore the plan reduced the electrician benefit by the amount necessary to balance the total benefits with the account allocation. However, it is usually wrong to pay the electrician less than half the total earned benefit and it is wrong in this case. Evidently the plan is very stubborn about not paying more than is allowed by the account deposits. And not so stubborn about making sure each beneficiary gets their proper benefit. If all the spouses who have been shorted benefits (as it seems they have) find out, the Plan will have a hell of a expensive mess to clean up. The Plan could have almost 700 divorced electrician benefits to check out.
ERISA does not allow the Plan to QUALIFY any DRO that increases payments to the ex-spouse above those specified in the Summary Plan Document. 29USC 1056(d)(3)(D). Therefore, allowing this ex-spouse $37 per year for “past service” benefits is a big error. The plan maximum for her is $10 per year. She had eight years of credit ($80) but was awarded $296. That equates to $216 deduction from the electricians benefit. ($296 - $80 = $216.) Her “future service” credit was also increased due to the Plan “averaging” concept that was unacceptable to the appeals court. Averaging in this case (past and future credits combined) gives the first spouse a $437 per month windfall.
Do the trustees really think the original intent of this pension plan was to short the electrician's benefit in order to pay spouses additional money. The promise of the Plan in 1972 was that spouses would not be able to receive more than half the earned benefits. And ERISA (which is part of the pension trust agreement) demands that all spouses be paid correctly. The Plans "AVERAGING" method will always unfairly pay one of multiple spouses because it moves money from marriage to marriage.
BOTTOM LINE
Spouse total earned credit based on Summary Plan Document was $124.
Spouse earned credit based on Plan’s 2005 averaging concept $561.
Original extra amount awarded spouse at the expense of electrician $437 per month. ( $561 - $124 = $437)
Fact: The Plan averaging system caused me to have a negative balance from my past service years.
Plan qualification of 1999 DRO is their admission that it is correct and ALSO PROOF of error in the qualification of the 2005 DRO. The author of the 1999 DRO is a long time recognized California QDRO expert Barbara DiFranza.
The Plan erred by improperly qualifying both of my first wifes DROS. The first do to the above explanation and the second because it also reduces the electrician benefit to less than that required by the Community property laws of the state of California. (A federal law mandate the plan has accepted as an ERISA governed pension plan.)
Cowboy Wisdom
Timing has a lot to do with the outcome of a rain dance.
HAPPY TRAILS
Saturday, January 7, 2012
IBEW LOCAL 332 Pension Trust benefit errors.
First Plan Error
First error included the Plan costing me $10K in extra support payments for wife number two by underpaying her benefit for years.
Second Plan error:
The Plan furnished wife number one a domestic relations order that was wrong. At the time she was not a beneficiary and it is contrary to plan rules to furnish private information without participant consent. The divorce was in 1980 and the request for information was in 2005, they must have wondered how much information she was entitled too after 25 years. The Plan wasted your money and a lot of mine constructing an incorrect document.
The Plan explanation: the procedure was different for divorces before 1984. Would you call that a bit of a broad explanation! They threw something together for her, without any input or permission from me, and without looking in the records to find the first QDRO, that had been in their office for five years. Why would they take an ex-spouses word as truth after twenty five years? Did they get all the court records to make sure nothing had changed? Perhaps the lawyers had a few billable hours to fill? Who knows! Well for all their work: they came up with a screwed up domestic relations order and then the Plan qualified it.
It cost me thousands to get her benefit reduced. The California Superior Court reduced her benefit because the Plan miscalculated what she had coming. The Plan said: All years of benefits earned by the electrician must be averaged together to calculate the ex-spouse benefit. The Plan had already accepted a QDRO (from wife #2) that did not average the yearly benefits. So who’s right? According to the court the averaging was wrong.
According to the Plan not averaging is OK (they did accept a non-averaging QDRO from my other wife.) The State of California did not agree with the Plan interpretation of the state law and made that clear in their opinion. The Plan screwed up.
Which leads us in another direction. The state court ruled the Plan DRO was incorrect. The Plan used the “sample plan formula” for the DRO calculation. Why is the same “sample plan formula” still published for use by electricians who want to do their own domestic relations order? Its been about four years. The court even “published” the opinion. That lets lawyers know the court has made a significant decision (case law)that can be sited at future trials. However in reality any lawyer putting together a DRO for an electrician will assume that the “sample formula” on the plan web site is correct and will not check case law. The original state judge assumed the Plan knew what was correct and rubber stamped the plan DRO, the next one may also. My state judge was an expert in criminal law not family law.
Instead of allowing $10 for 1964 to 1973 the Plan thought my ex should get $37 due to the averaging. Old timers did not pay a nickel into this part of the fund, its called “past service credit”. The maximum benefit is $10 per year of past service. According to the Plan; for past service she was entitled to about $250 and I was entitled to $90. She was happy with that split.
For the rest of her years “future service credit” the Plan also allowed her $37 per year as a benefit each month of her retirement. Her total monthly benefit, from the original Plan calculated DRO, was more than the total amount accumulated in the account during the marriage. After the trial the Plan delegate (a Kraw & Kraw attorney acting as substitute trustee) suggested that some kind of conspiracy, not a plan error, was responsible for the new lower benefit. I’m glad he wasn’t my mouthpiece, that statement would be embarrassing. Can you see the headlines? IBEW PENSION A
TRUSTEES claim court conspiracy!
The Plan rule about privacy referred to above is in “Procedures for handling proposed orders and enquiries.” And was still on the benefits web site the last time I looked along with the “sample QDRO” which is really a sample “DRO” but that’s another error.
All this averaging baloney is supposed to be easier than looking at the computer sheet, adding the benefit from each year of marriage and dividing by two. Half for participant and half for spouse unless there is some court added exception. If they can’t divide they can multiply by .5 that’s not too hard either. Now lets see, that would be 16 entries for the 16 years of marriage plus divide by two for a total of 17 entries. Compared to:
Divide the total amount of benefits over forty years by a denominator consisting of the number of benefit years to get the average contribution. Multiply average contribution by the number of years of marriage. That equals 40 entries for benefits, one division entry, and one multiplication entry for a total of 42 entries. IS THIS THE EASY WAY?
I was told that this is the easy way because its uniform for all the UAS customers such as plumbers, sheet metal, etc.
Well then how about the fair way? California is all tied up in being fair. Is it fair to lower wife #2’s benefit from 1996, the last year of the second marriage, to an amount less the half the total contribution? Is it fair to lower her first year of benefits from 1981? Is it fair to raise wife #1’s benefit to $37 in 1964 when her total credit was $10 (contribution was zero)? Is it fair to raise wife #1’s benefit to $37 in 1979 when her total contribution was less than $4 (four dollars)? Is it fair to lower the participant’s benefit to below half of the total benefit earned during his benefit accruing years? Who the hell was it that wore a tool pouch, carried a ladder, packed a lunch, pulled the wire and lifted the material? When my spouse wanted a gym membership I suggested she carry a six foot ladder around all day but she got the membership anyway.
The Superior court of the state of California demands in the case of Lehman v Lehman that the spousal benefit be based on the years of marriage. It is stated in that opinion five times by Justice Mosk. When the California Superior Court saw the case of Gray v Gray years later they confirmed that the averaging used by the plan for the original DRO was not FAIR.
Lehman v Lehman is the same case law used by the Plan to justify the original DRO they concocted for my ex-spouse. Its referred to on the benefits web site. Click on QDROs and forms.
“Rumor travels faster, but it doesn’t stay as long as truth.” Will Rogers
Observations:
The last union meeting had no report on the medical plan as announced in November.
The last meeting had no report from the Pension Trustees in charge of our $380,000,000 fund.
Happy Trails
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