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.





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