Using QDRO with Optional Forms of Payment
If your company intends to calculate QDRO benefits using Pension Administration, be sure your plan rules support these calculations. QDRO calculations typically start with a fixed benefit amount and only run these functions: early and late retirement factors, benefit formula, and optional forms of payment. Even if there are minimal optional forms available to QDRO alternate payees, you need to have optional forms of payment results available so that the payment process has access to the payment amounts.
Because QDRO alternate payees are not permitted to make a new spouse the beneficiary of a QDRO benefit, joint and survivor forms are generally not available to QDRO alternate payees unless the plan permits non-spouse beneficiaries.
If you offer limited optional form choices to alternate payees, you may need to use different definitions for the original employee and the alternate payee. You can handle this requirement through the system's grouping capabilities. Your function result might look like this:
|
Group Criteria |
Definition |
|---|---|
|
Regular employees |
Full set of optional forms of payment |
|
QDRO alternate payees |
Reduced set of optional forms of payment |
To perform calculations for QDRO alternate payees, a pension administrator first creates an employee ID (actually, a "non-employee" ID) for the alternate payee. This enables the administrator to run the QDRO calculation based on the alternate payee ID.
Important! Because the calculation is based on the QDRO payee's ID, all aliases referencing employee data are resolved based on the QDRO payee data, not the original employee. It is important to keep this in mind as you set up your plan rules.
For example, the alias BIRTH_DT would produce the alternate payee's date of birth, not the original employee's date of birth. The alias SBIRTH_DT, which normally references the birth date of an employee's spouse, is usually not valid for QDRO calculations, which typically do not incorporate any reference to a new spouse. If you want to reference the original employee's birth date in a QDRO calculation, use the special alias QDRO_EE_BD (QDRO employee birth date).