ISSUE: Division of defined benefit plans.

FACTS:

1) The parties’ dissolution agreement included the following clause:
The parties shall divide the total balance of their retirement accounts with the Plaintiff retaining 50% and the Defendant retaining 50%. The agreement failed to provide a date of valuation and failed to address what would happen should the accounts increase or decrease in value from that date.

2) In attempting to correct mistake number 1, the parties signed a stipulation providing:
The parties stipulate to the court that the award from the GE Savings & Security Plan ($100,000) and Alstom, Inc., 401k Plan ($147,854) is the amount needed to equalize their retirement plans.
This agreement also failed to designate what, if anything, would happen if the amounts in the plan increased or decreased. Sure enough, when the QDRO’s were finally prepared and ready to qualification, the amounts had changed (one account didn’t even have enough to fund the full distribution).

HOLDING: The Superior Court ruled that under CT law, property is valued as of the date of the dissolution of marriage if the parties have not ruled otherwise. Therefore, agreement number two recognized that the proper distribution amount was one half of the balance in the accounts as of the date of dissolution.

LESSONS:

1. If using a percentage in the QDRO for division of a defined benefit plan, designate the date of valuation and whether or not the value on that date, when the benefit is actually distributed, will reflect increases or decreases in value in the intervening period.
2. The same is true if the agreement designates an amount rather than a percentage.
3. Prepare the QDRO prior to the divorce allowing full discussion of the necessary provisions. Attach the QDRO to the dissolution agreement and incorporate its terms. Retain jurisdiction in case the plan administrator does not approve the terms.
4. If the QDRO is not ready on the date of dissolution, include in the divorce agreement a clear recitation of every term that will be in the QDRO as it can not do anything more or less than is in the initial agreement. Retain jurisdiction in case the plan administrator does not approve the terms.