DENIED RESPONSIBILITY - IBEW LOCAL 332 Pension Trust A

A comment about the “BROWN FORMULA” and the IBEW Local 332 Pension Trust
You can find the text
On the IBEW Local 332 Plan Benefits WEB site (ibew332benefits.com):
Click on Pension
Click on Forms
Click on Qualified Domestic Relations Orders.

On page 4 is the following:

F. SAMPLE QDRO

The following sample QDRO language divides the community property portion of the benefits equally between 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.

It is also 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 into account the possibility of different benefit accrual rates in different years. Employees participating in these Plans will often accrue different 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 of the sample domestic relations order.

5. The community Benefit under 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 the 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 are to begin, in accordance with the terms of the Pension Plan in effect at that time.

Now that you have the background I’ll comment:

In my case the above formula (calculated and fought for by the Plan) proposed my first wife receive $560 per month. The total benefit earned for both of us for those years of marriage: $165.21. Past service benefit: $160. Total $325. The years were 1963-1978.
By any standards $560 is absurd based on the $325 total credited to the account.

Lehman v Lehman (sited by Plan in F. above) is very specific: “Results must be reasonable and fairly representative of the relative contributions of the community and separate estates.” The same statement used in the appeal decision that canceled the original QDRO.

Lehman v. Lehman (sited in F. above) also declared five times that the benefits received must be earned during the marriage.

In my appeal of the Benefit awarded by the Plan written domestic relations order the Panel of three superior court judges were certain the “Brown” formula (time rule) did not apply at the time of divorce. The pension plan believed it did apply.

In Gray v. Gray (P.16) the court said: “On the face of it “Brown “ did not either establish or promote the use of the time rule, or any specific formula, as a method for the ultimate pension division on the court’s exercise of its retained jurisdiction.”

This court statement of 2007 is contrary to the trustee opinion stated in their literature that still has not been changed to comply with the court opinion. It is the Plan fiduciary duty to be timely. Not changing the Plan text to meet the law is a breach of fiduciary duty. Not knowing is not an excuse because the Plan legal adviser was informed.

Specifically addressing the details of my marital agreement Gray v. Gray stated: “not at issue was whether the “Brown Formula” was synonymous with the time rule as an apportionment method. The reference to the “Brown Formula” there did not even necessarily imply or endorse the time rule, but rather described the notion of a “Brown formulation order,” which would require valuation of the community property interest in the pension at the time the benefit became payable instead of at the time of the earlier dissolution, a concept expressly endorsed by “Brown’s in-kind division through the court’s reservation of jurisdiction over pension rights until they become payable in the future.” Page 19.

The Plan still insists that the time rule and “Brown Formula” are one and the same. The superior court ruling found the formula just holds the benefits until retirement. Perhaps the trustees should sue the California Superior Court for a wrongful interpretation (:>) or admit to a breach of fiduciary duty.

“The record reveals that the parties initially stipulated to “distribution of [IBEW] retirement fund reserved” and that no one requested the court to later divide the pension benefits expressly per the time rule or any other specific method of apportionment.”

This court statement is contrary to the plan opinion that the “Brown Formula” is the same as the time rule. It is the use of the time rule that threw my benefit below community property law standards.

Gray v Gray page 22 -23 DISPOSITION

The order providing for apportionment of James’s defined benefit pension per the time rule is reversed. The matter is remanded to the trial court with directions to exercise its discretion to equitably apportion the defined pension benefits and divide the community interest in accordance with Family Code 2610, subdivision (a), and 2550. We express no opinion on the proper method of apportionment, i.e. per the time rule or any other particular formula.

This is confirmation of my charge that the Plan improperly “qualified” the first domestic relations order given them by the state. And since the second order from the state allowed a shortage of benefits to the participant, the Plan acted improperly when they qualified it. (Of coarse they told the judge the state had already qualified the new domestic relations order but, of coarse, the state is not allowed by ERISA to do that.

Other ramblings:

Rules and procedures for Administering Qualified Domestic Relations Orders. (A plan document)

A. QDRO Requirements

2. Prohibited Provisions; the order will fail to be a QDRO if it does any of the following
a. REQUIRES THE PLAN TO PROVIDE INCREASED BENEFITS:

PAYING MY EX-WIFE $37 PER YEAR FOR PAST SERVICE IS $27 PER YEAR OF INCREASED BENEFITS. Maximum benefit for her past service years is $10 per year.

D. Procedure for Handling Court Orders
3.Acceptance of order
4. Rejection of order
THEY ADMIT HERE TO HAVING A CHOICE OF ACCEPTING OR REJECTING THE ORDER. Perhaps they should have told the judge, when he asked, that they could reject the order. It is still not to late, an honest trustee would have written the court after the hearing and corrected the statement. Or, when the trustees replied to my appeal of the dismissal order they could have easily pointed out their error to the court. Their fiduciary role is indeed in question.
How do I know they have done nothing? I check the case docket every week.

7.Trustee Discretion: The trustees or their delegates have full discretion to determine whether either plan should comply with a proposed final order. (They forgot to tell Judge Lloyd when he asked in court.)

8.The Plan will not sign an order.
(But they even wrote this order.)

E. Procedure; last sentence.
This will avoid issuance of a non-qualified order with which the plan cannot comply.
Gad the papers say this over and over but in court, when it mattered, they forgot??????




Are we proud owners of KBR and Halliburton? See the plan financial report. Which one did the faulty electrical work that killed people in Iraq? It was Halliburton accused of all the big time over-charges.

“Even if you’re on the right track, you’ll get run over if you just sit there.”
Will Rogers

Do you think Will understood fiduciary duty better than our trustees? Four years and the vanquished Plan procedure remains the same.

Happy Trails