Thursday, January 28, 2016

Court opinion of the IBEW LOCAL 332 PENSION Trust A SAMPLE QDRO formula

RULING BY THE CALIFORNIA SUPERIOR COURT IN THE CASE OF GRAY v GRAY

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 sections 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.
WE CONCUR: BAMATTRE-MANOUKIAN, Acting P.J., and McADAMS, J.



The above disposition is by the California Superior court in the case of Gray v Gray regarding spousal benefits from IBEW LOCAL 332 Pension Trust A. I underlined and emphasized the important wording.

IBEW PENSION TRUST A recommends and accepts QDROs based on the time rule formula, even though this court ruling rejects the validity of the time rule for our pension.


The IBEW LOCAL 332 Pension Trust explanation of the “Brown” formula (that they endorse) also known as the “Time” formula mentioned in the Superior Court deposition is below.

“F. SAMPLE QDRO

It also should be noted that the formula used in both samples for dividing the benefits in part A is the standard “Brown” formula developed by the California courts and specifically approved by the California Supreme Court in Lehman v Lehman. ….........”

Who do you suppose is correct? The Plan or the Superior court?
The Superior court ruled against the “Time” (Brown) formula for our pension but the Plan still encourages its use."

Wednesday, January 6, 2016

KEEP IT SIMPLE!!!!

IBEW LOCAL 332 Pension Trust A benefit formula is very complicated.

Step # 1 Determine total benefit accrued to employee.

Step #2 Calculate a multiplier that supposedly will create community property

Number of years during credited service employee was married
                                   DIVIDED BY                              
Total number of years employee is credited with accrued benefits
                                     EQUALS
                                     Multiplier
Step #3 Multiply #1 by #2 multiplier to get ( Plan's definition of) community property

Step # 4 Divide Plan community property appropriately, usually 50/50

Questions: Should full employment years get the same credit as partial years?
What if the employee worked 500 hours the first year and 3,000 the last year?
Why would spouse get a share of last year if they were not married that year?

ERISA's spousal benefit formula is very SIMPLE.

ERISA 's PENSION MANDATE

Community property is earned during periods of economic partnership.

Step # 1 Determine the benefits employee accrued during marriage

Step #2 Split #1 50/50

By the way, you get a copy of your accrued benefits every year and if you loose the copy the plan has one you can duplicate.

And just for the record, community property is earned during the marriage only. Therefore the plan formula  is not accurate when used with our "incremental" benefit plan.  (Do the math.)

Wednesday, July 9, 2014

Extra money for the EX

A strange thing happened on my way to retirement.  My first wife was able to increase her pension from her  contributions of $221,  to $560.  It was a very simple maneuver.  She let the plan use the sample QDRO.  I, on the other hand, had to deduct her extra cash from my monthly check.

Could this  happen to you?  

Friday, July 4, 2014

TIME RULE and IBEW LOCAL 332 Pension Trust A


Warning!! IBEW 332 PENSION A , San Jose, sample QDRO does not comply with community property law.
 
My first wife's benefit calculation was 220% of the community and my second wife's benefit was calculated to be 25% of community.  The correct amount should have been 50% for each.
 
A Defined Incremental Benefit Plan, such as this, does not meet the "during marriage" requirements of QDROs for California community property law when calculated with the "TIME RULE" as suggested by the Plan. 

Thursday, June 26, 2014

QDRO Education for IBEW 332 electricians facing divorce.

IBEW Local 332 Pension Trust A

QDRO Education for electricians facing divorce.

It is the responsibility of the Plan to “qualify” only proper domestic relations orders, DROs, presented to them by alternate payees. Only the Plan or a Federal judge can qualify a DRO turning it into a qualified domestic relations order, QDRO. A state court cannot qualify a DRO. The state can approve it but the Plan must certify with the “qualification” that the DRO meets federal standards.

The Part A trust establishes a separate account for each electrician with credited contributions. Each year will have different accrued benefits because the benefits are based on the number of hours worked and the hourly contribution rate negotiated with management for the year. Example: spend a lot of time on the books and your accrued yearly benefit could be lower than the previous year if you worked fewer hours..

SO WHAT ? The 332 recommended QDRO formula is based on the PG&E pension plan. Their participants get yearly credits (not hourly) so that long vacation (or sick leave) may not hurt their retirement pension. And, their pension benefits are based on years of work not hours. Each year accrues the same benefit, unlike Plan A that has a different benefit for each year. The PG&E pension does not have a separate account for each worker because benefits depend on the total years of service.

ERISA law concerning spousal rights to your pension is based on the benefits contributed “during marriage” only. The 332 pension trustees have chosen to use the PG&E QDRO formula that does not work for the IBEW 332 pension. It does not meet the intent of Congress according to the Carmona v. Carmona Federal Court decision because of our changing benefits.


Carmona v Carmona

The Hopkins rule applied in this case may not clearly protect a non-working spouse whose interest in the surviving spouse benefits may have accrued over time, since Lupe was not married to either Janis or Judy during most of his working years when he earned the pension benefits.   Nonetheless, such a rule would protect a non-working spouse in many situations involving a post-retirement attempt to transfer surviving spouse benefits.   The finely tuned congressional scheme would not be served by state court DROs that attempt to divest a non-working spouse's interest in her surviving spouse benefits.   Similarly, congressional intent is not advanced by permitting a subsequent post-retirement spouse to collect benefits accrued during an economic partnership she or he was not a part of.11 - See more at: http://caselaw.findlaw.com/us-9th-circuit/1477402.html#sthash.q123uQAr.dpuf

Whats the difference?
PG&E employees get the same benefit each year, so the average yearly benefit is
equal to the yearly benefit.
IBEW 332 electricians get a different benefit each year so the average benefit will not be the same as the yearly benefit and therefore does not meet the ERISA QDRO standard for benefits accrued during economic partnership. As wages increase our benefits go up therefore benefits at the end of a carrier can be much higher than at the beginning. For me that was $10 in 1963 and $200 in 1995.

I retired after 40 years. My spouse from 1963-1979 was awarded the average yearly benefit by the plan (PG&E formula). The contributions for those years were $245 and her pension was $560. By the way we should have split the $245 contribution 50/50 ($122 each). It did not make me happy to loose that $438 each month.(560-122=$438). So I took it to court and they agreed the Plan formula was wrong and they lowered her pension. Cost me $20K so I hope you can avoid the court thing.

I am trying to get a letter from ERISA stating that pension benefits are to be divided based on the years of “economic partnership” as stated in Carmona. And, I sent Judy Sargent our Plan Administer the Carmona v Carmona paragraph and have gotten no response.

The Plan has not responded to the California case of Lehman v. Lehman that uses the phrase “during marriage before separation” either. Lehman is more interesting because the Plan sites it as the authority for domestic relations orders. But the Plan does not recognize that it repeats the “during marriage” quote over 15 times and does not indorse any QDRO formula for our plan.

If you have a QDRO based on the Plan formula check it to see if you are a winner or loser. If your ex is getting less than 50% of the during marriage benefit you may wish to forget you read this. If the spouse is getting more than 50% please help me make some noise. Someday the trustees will need to be honest and the sooner the better. If you are going to retire with your original spouse you should still be wondering why the Business manager and plan reps are letting this go. If it ever blows up it could cost the plan who knows how much to fix it. And aren't us union people trying to show the others that we are for everyone getting a square deal?



Friday, February 7, 2014

WARNING TO IBEW LOCAL 332 PENSION A MEMBERS

The IBEW LOCAL 332 PENSION PLAN A is still using the same old and WRONG benefit formula in their sample QDRO.

The sample QDRO uses wording that agrees with California law, benefits are earned during marriage, as stated in the Lehman court case. But the plan formula in the QDRO does not meet the “during marriage” requirement.

The formula in the document includes ALL years of the electricians contributions rather than just the MARITAL years.

There are a lot of variables for divorce settlements but one thing is ABSOLUTE. The electrician's former spouse cannot receive more than the total contributed during the marriage before separation. The plan sample QDRO formula is not limited to the marital contribution. And normally the former spouse is only entitled to half of the contributions made during marriage.

My point is this: the Plan Sample QDRO contradicts itself. One paragraph sites the California community property law that splits the pot 50/50. And the next paragraph uses the PG&E formula that can increase spousal benefits depending upon the total of all contributions made to the electrician's account. The PG&E workers have a different contribution system.

Here is a rule of thumb: if the spousal benefit is more than half the total of contributions during the marriage the calculation is suspect. If the spousal share is more than the total contribution made during the marriage the calculation is WRONG.

Remember: if the spouse gets more the electrician gets LESS.

Be very careful if your divorce settlement uses the plan formula. The Plan calculation for my first spouse was over double her share and my second spouse's calculation was half her share. This formula can also be a disaster for a former spouse.

The paragraphs below are from the sample QDRO found on the Benefits web site in the “forms” area.

4. The Community Benefit is the portion of the benefit
payable by each Plan which is attributable to Employee's employment
during the marriage. For purposes of calculating the Community
Benefit, the period of the marriage is the period from
_____________ to _______________.
For purposes of this QDRO:

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 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.

Author note.
Paragraph 4 (above) limits benefit to employment during marriage.
Paragraph 5 uses the total benefit earned during all years of the electricians career.


Monday, September 16, 2013


Warning to divorced 332 Plan A members

NOTICE THE PLAN STATEMENT THAT RECOGNIZES “LEHMAN v. LEHMAN”

It also should be 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 a different benefit amount each year, because of

NOTICE WHAT “LEHMAN” CONTAINS THAT THE PLAN IGNORES

Referring to community property the term “during marriage before separation” is sited 16 times in the Lehman court opinion. Below are three examples.

        2) Generally, all property acquired by a spouse during marriage before
        separation is community property.
    Throughout our decisions we have recognized that the community owns all (such) rights attributable to employment during marriage before separation.

    (4)Hence if the right to retirement benefits accrues, in some part, during marriage before separation, it is a community asset--------
Comment:

The “Brown” averaging formula used by the Plan does not meet the requirements of the Lehman opinion when used with the 332 Plan. An average contains a group of numbers. The Plan average contains single years, married years, and married to others
years. If you average all years of Plan contributions you are by definition combining all those years and using years other-than time “during marriage” as required by Lehman. 

WHY DO I KNOW?

The plan awarded my ex $560 out of total contributions of $245. Under the worst case scenario (not so) she could have gotten $245 but how do they explain $560? 

I HAVE BEEN ASKING FOR AN EXPLAINATION SINCE 2007. They have not admitted the error or explained the $560. They have refused to answer any more inquiries.



ARE YOU NEXT?