Qualified Domestic Relations Order

Type "A" splits the member's accumulated contributions account.

Type "B" splits the member's eventual monthly retirement benefits. It is appropriate in some cases where the member is vested but not yet retired, the marriage is of long standing, and the parties desire to split the member's eventual retirement benefits as well as make other arrangements to protect the non-member spouse's interests. This model provides the highest level of protection for the nonmember spouse ("alternate payee"). It can be modified to provide a lesser level of protection. For example, the model provides for the member to select a Joint and One-Half Survivor Option upon retirement, naming the alternate payee as the survivor to receive, upon the member's death, one-half the member's monthly benefit for as long as the alternate payee survives. There is another type of option available to retiring members, called a "Life Certain Option," that can be used to protect an alternate payee for a five-, ten-, or fifteen-year period following retirement, rather than for the lifetime of the alternate payee. The actuarial reduction in benefit to fund a life-certain option is less than for a joint and survivor option. A provision that the member be required to select one of the life certain options, rather than a joint and survivor option, may be substituted in the Type B QDRO.

Type "C" splits the member's current, ongoing monthly benefits. It is appropriate when the member is already retired at the time the QDRO is entered. This model may be used in any case, instead of the Type A or Type B, if the parties desire to provide the alternate payee with a split of the member's maximum retirement benefits for exactly as long as the member lives, with no other payment to or protection for the alternate payee.

Although there is no specific Model, be aware that disability benefits from the KPERS plans are also subject to domestic relations orders, including garnishments for support.

Not a 401(k) plan. KPERS is a contributory defined benefit plan, not a defined contribution plan (it is not a 401(k) plan).

Not an ERISA plan. KPERS is not an ERISA plan. KPERS is a government plan as defined by section 3(32) of ERISA, 29 U.S.C. sec. 1002(32). Government plans are exempt from ERISA pursuant to section 4(b)(1) of ERISA, 29 U.S.C. Sec. 1003(b)(1).

Governed by Kansas law. QDROs accepted by KPERS are governed by and administered under K.S.A. 74-4923(b), as amended by L. 1994, ch. 231, sec. 5. That statute provides, in relevant part:

Limits on Alternate Payee's rights. In a QDRO, the nonmember spouse is referred to as the Alternate Payee. When a QDRO is accepted by KPERS ("the Plan"), the Alternate Payee's award as stated therein is maintained, in essence, as a lien on the member's (Plan Participant's) account. No separate account is maintained. The Alternate Payee has a right to receive distribution of the specified share of the member's account upon the member's eligibility and application for retirement, unless prior to retirement the member withdraws or dies, in which case distribution to the Alternate Payee occurs at such time. The distribution that becomes available upon the member's withdrawal from the Plan is not available until the member actually applies to withdraw. The member's termination of employment alone is not sufficient. The Alternate Payee is not a member of the Plan and has no other rights under the Plan, except to receive current information from time to time, upon request. The Alternate Payee has no right to name a beneficiary. It is the Alternate Payee's obligation to keep the Plan advised of any change in his/her legal name or mailing address.

Interest on Alternate Payee's Award. KPERS will credit interest on the Alternate Payee's award under the QDRO, if the award is for a lump sum, from and after the date of division, at the same rate and in the same manner as it accrues on the member's remaining portion of the accumulated contributions account. No earnings are credited on a daily basis. Under current Kansas law, 8 percent interest (or 4 percent, if the employment date is July 1, 1993, or later) is credited to members' accumulated contributions accounts each June 30, based on the balance as of the previous December 31.

Method of Payout on Type "A" QDROs. KPERS has established with its actuarial consultant the necessary procedures for making a distribution to an Alternate Payee when (a) the occasion for the distribution is retirement and (b) the award is to be distributed in a lump sum. This is the type of payout that occurs under a Type "A" QDRO. The Plan's actuary provides the Plan with factor tables for permanently reducing the member's monthly benefit at retirement, to account for the distribution of a lump-sum from the member's account. The Alternate Payee is given an opportunity to apply for a direct rollover to an IRA or another qualifying plan. The member is informed of the consequent permanent reduction to his/her monthly retirement benefit.

No Need to Call the Award "Maintenance." Since July 1, 1994, QDROs need not identify the award to the Alternate Payee as "maintenance." The 1994 amendments to K.S.A. 74-4923(b) incorporate the definition of QDRO found in the Internal Revenue Code. Therefore, QDROs for property division as well as for maintenance and child support are now enforceable against KPERS. The tax consequences of receiving or paying a property settlement, as opposed to receiving or paying maintenance, may be different. Do not call the award maintenance if it is meant to be a property settlement.