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Traditional Defined benefit plans are those plans in which an employer promises to pay a monthly benefit to the participant upon retirement according to the rules of the plan. The plan typically uses a formula that incorporates salary and years of service or a benefit multiplier and pension credits to calculate the monthly benefit payable upon retirement. The monthly benefit can be derived at any point in time by plugging the appropriate factors into the formula
ATTENTION: In the following Model Settlement Agreement, the Plaintiff is the Participant and the Defendant is the Alternate Payee. (You must insert the correct designations - Example: Plaintiff, Petitioner, Complainant, Defendant or Respondent)
View Sample Traditional (Retired) Defined Benefit Agreement Language (PDF) View Sample Traditional (Shared Interest) Defined Benefit Agreement Language (PDF) View Sample Traditional (Separate Interest) Defined Benefit Agreement Language (PDF)
Plaintiff is a Participant under the [Insert Exact Name of Plan] (hereinafter referred to as Plan). Through a Qualified Domestic Relations Order “QDRO”, Defendant is hereby granted a portion of the Plaintiff’s retirement benefits under the Plan as specified below.
If a PERCENT AMOUNT is being Awarded (choose an option)
Option 1: Percent: (choose either A or B)
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent
* If the Plaintiff is currently receiving benefits, the QDRO CANNOT reflect a Percent of the Marital Portion. Instead, the QDRO must be drafted using a Percentage of the Total Monthly Benefit currently being paid to the Plaintiff. In order to calculate a Revised Percent to be inserted into the QDRO, do the following:
Step #1: Determine the following Dates. 1. The Date the Plaintiff began participating (Start Date)in the Pension Plan. 2. The Date of Marriage. 3. The Date the Marriage Ended (Cut-off-Date or Date of Classification). 4. The Date of Retirement. 5. The Date of Termination if prior to the Date of Retirement.
Step #2: Determine the Marital Coverture Fraction.
Numerator of the Fraction: The number of months the Plaintiff participated in the plan during the marriage. [Use Start Date if after the Marriage Date, otherwise use the Marriage Date] to [Use the earlier of the Termination Date or Retirement Date if prior to the Marriage End Date, otherwise use the Marriage End Date.]
Denominator of the Fraction: The number of months the Plaintiff participated in the plan to the earlier of the Termination Date or Retirement Date. [The Start Date] to [The earlier of the Termination Date or Retirement Date]
Step #3: Determine the Revised Percent.
Coverture Fraction multiplied by the Defendant’s Original Percent equals the Revised Percent to be inserted in the QDRO.
EXAMPLE: The Defendant is awarded 50% of the marital portion. Based on the following dates what Revised Percent should be inserted in the QDRO?
Start Date: July 1, 1970 Marriage Date: March 15, 1973 Marriage End Date: May 1, 2004 Retirement Date: January 1, 2004 Termination Date: July 15, 1988 Numerator: 3/15/1973 - 7/15/1988 = 184.0 Months = 0.8499 Denominator: 7/01/1970 - 7/15/1988 216.5 Months 0.8499 X 50% (Defendant’s Original Award) = 42.49% Revised Percent of Total Benefit
Option 2: Dollar Amount:
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert $ Amount] Dollars of the Plaintiff’s gross monthly pension benefits.
Cost of Living Adjustments: The Defendant [Insert Will or Will Not] receive a pro-rata share of any Post-retirement Cost of Living Adjustments.
Early Retirement Subsidies: The Defendant [Insert Will or Will Not] receive a pro-rata share of any Early Retirement Subsidies.
Early Retirement Supplements, Interim Supplements or Temporary Benefits: The Defendant [Insert Will or Will Not] receive a pro-rata share of any Early Retirement Supplements, Interim Supplements or Temporary Benefits that become payable to the Plaintiff which are not considered by the Plan Administrator to be a part of the Plaintiff’s accrued benefit.
Death of Plaintiff: The Defendant will be treated as a surviving spouse of the Plaintiff, if the Plaintiff dies before the Defendant’s award is segregated into a separate account.
Plan Administrator Fees: Any QDRO processing or reviewing fees charged by the Plan Administrator shall be deducted [Choose Option A, B or C]
A. - equally from Defendant’s and Plaintiff’s share of the retirement benefits. B. - from Defendant’s share of the retirement benefits. C. - from Plaintiff’s share of the retirement benefits.
Processing The Qualified Domestic Relations Order: Defendant’s Attorney will be responsible of preparing, submitting and overseeing the approval of the QDRO until its final acceptance by the plan administrator as a QDRO. It is understood that Defendant’s Attorney may employ a QDRO drafting company to assist in the preparation and submission of the Order to the plan administrator for approval as a QDRO.
*Under this approach the Defendant’s share of the benefits are actuarially adjusted to Defendant’s life expectancy. Once the Defendant starts receiving benefits, the Defendant’s right to continued benefits shall not be affected by the death of the Plaintiff.
Payment Approach: The QDRO shall utilize the Separate Interest Approach where the Defendant’s share of the benefits is actuarially adjusted to Defendant’s life expectancy.
[Choose Option A, B, C, D, E or F]
Option A. – Percent of Total Accrued Benefit earned through the Marriage End Date
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the Plaintiff’s Accrued Benefit accumulated under the Plan as of [insert the Marriage End Date], and as may be further adjusted by any early commencement reduction factors or actuarial equivalency adjustments.
Option B. – Percent of Total Accrued Benefit earned through earned through a Specific Date
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the Plaintiff’s Accrued Benefit accumulated under the Plan as of [insert the Specific Date], and as may be further adjusted by any early commencement reduction factors or actuarial equivalency adjustments.
Option C. – Percent of the Marital Portion earned through a Specific Date
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the "Marital Portion" of Plaintiff’s Accrued Benefit accumulated under the Plan as of [insert the Specific Date]. The Marital Portion of the Plaintiff’s accrued benefit shall be determined by multiplying the Plaintiff’s Accrued Benefit by a fraction, the numerator of which is the number of months of the Plaintiff’s credited service in the Plan earned during the marriage from [Insert Plan Start Date or Marriage Date (whichever is the later date)] to [Insert Specific Date], and as may be further adjusted by any early commencement reduction factors or actuarial equivalency adjustments.
Option D. – Percent of the Marital Portion earned through the Marriage End Date
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the "Marital Portion" of Plaintiff’s Accrued Benefit accumulated under the Plan as of [insert the Specific Date]. The Marital Portion of the Plaintiff’s accrued benefit shall be determined by multiplying the Plaintiff’s Accrued Benefit by a fraction, the numerator of which is the number of months of the Plaintiff’s credited service in the Plan earned during the marriage from [Insert Plan Start Date or Marriage Date (whichever is the later date)] to [Insert the Marriage End Date], and as may be further adjusted by any early commencement reduction factors or actuarial equivalency adjustments.
Option E. – Percent of the Marital Portion earned through the Date of Retirement
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the "Marital Portion" of Plaintiff’s Accrued Benefit accumulated under the Plan as of Plaintiff’s Date of Retirement. The Marital Portion of the Plaintiff’s accrued benefit shall be determined by multiplying the Plaintiff’s Accrued Benefit by a fraction, the numerator of which is the number of months of the Plaintiff’s credited service in the Plan earned during the marriage from [Insert Plan Start Date or Marriage Date (whichever is the later date)] through the Date of Retirement, and as may be further adjusted by any early commencement reduction factors or actuarial equivalency adjustments.
Option F. – Dollar Amount per Month
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert $ Amount] Dollars per month of the Plaintiff’s normal retirement accrued benefit. Therefore, this specified dollar amount shall be further adjusted as necessary to convert the benefit to the Defendant’s life expectancy, commencement date, and elected form of payment option. As a result, it is understood that the Defendant may receive a monthly dollar amount different from that specified above.
Early Retirement Subsidy: The Defendant SHALL [insert either ALSO or NOT] be entitled to a proportionate share of any Early Retirement Subsidy provided to the Plaintiff on the date of the Plaintiff’s retirement.
Early Retirement Supplements: The Defendant SHALL [insert either ALSO or NOT] be entitled to a proportionate share of any Early Retirement Supplements provided to the Plaintiff on the date of the Plaintiff’s retirement.
Cost of Living Adjustments: The Defendant SHALL [insert either ALSO or NOT] receive a proportionate share of any Post-retirement Cost-of-living Adjustments or other economic improvements received by the Plaintiff on or after the Plaintiff’s date of retirement.
Death of Plaintiff: If the Plaintiff dies before the Defendant starts receiving benefits, the Defendant [insert either SHALL or SHALL NOT] receive a Qualified Pre-retirement Survivor Annuity in the amount of Defendant’s award.
Death of Defendant: If the Defendant dies before the Plaintiff starts receiving benefits, the Defendant award shall [choose A or B]
A. - become payable to the Defendant’s designated beneficiary (or estate). B. - revert to the Plaintiff.
*Under this approach the Defendant shares in the pension payments made to the Plaintiff. Payments are not actuarially adjusted to the Defendant’s life expectancy; they are based on the life expectancy of the Plaintiff. Therefore, when the Plaintiff dies payments to the Defendant stop, unless the Plaintiff elects post-retirement survivor protection for the Defendant.
Payment Approach: The QDRO shall utilize the Shared Payment Approach where the Defendant’s share of the benefits are based on Plaintiff’s life expectancy.
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the Plaintiff’s Accrued Benefit accumulated under the Plan as of [insert the Marriage End Date], and as may be further adjusted by any early commencement reduction factors.
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the Plaintiff’s Accrued Benefit accumulated under the Plan as of [insert the Specific Date], and as may be further adjusted by any early commencement reduction factors.
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the "Marital Portion" of Plaintiff’s Accrued Benefit accumulated under the Plan as of [insert the Specific Date]. The Marital Portion of the Plaintiff’s accrued benefit shall be determined by multiplying the Plaintiff’s Accrued Benefit by a fraction, the numerator of which is the number of months of the Plaintiff’s credited service in the Plan earned during the marriage from [Insert Plan Start Date or Marriage Date (whichever is the later date)] to [Insert Specific Date], and as may be further adjusted by any early commencement reduction factors.
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the "Marital Portion" of Plaintiff’s Accrued Benefit accumulated under the Plan as of [insert the Specific Date]. The Marital Portion of the Plaintiff’s accrued benefit shall be determined by multiplying the Plaintiff’s Accrued Benefit by a fraction, the numerator of which is the number of months of the Plaintiff’s credited service in the Plan earned during the marriage from [Insert Plan Start Date or Marriage Date (whichever is the later date)] to [Insert the Marriage End Date], and as may be further adjusted by any early commencement reduction factors.
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the "Marital Portion" of Plaintiff’s Accrued Benefit accumulated under the Plan as of Plaintiff’s Date of Retirement. The Marital Portion of the Plaintiff’s accrued benefit shall be determined by multiplying the Plaintiff’s Accrued Benefit by a fraction, the numerator of which is the number of months of the Plaintiff’s credited service in the Plan earned during the marriage from [Insert Plan Start Date or Marriage Date (whichever is the later date)] through the Date of Retirement, and as may be further adjusted by any early commencement reduction factors.
Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert $ Amount] Dollars per month of the Plaintiff’s normal retirement accrued benefit. However, such amount may be reduced as a result of any applicable early commencement reduction factors applied to the Plaintiff’s benefits in the event the Plaintiff elects to commence benefits before Plaintiff’s normal retirement date.
Death of Plaintiff Before Retirement: If the Plaintiff dies before the Defendant starts receiving benefits, the Defendant [insert either SHALL or SHALL NOT] receive a Qualified Pre-retirement Survivor Annuity in the amount of Defendant’s award.
Death of Plaintiff After Retirement: If the Plaintiff dies after the Defendant starts receiving benefits, the Defendant [choose A or B]
A. - SHALL NOT receive a Qualified Joint and Survivor Annuity in the amount of Defendant’s award. B. - SHALL receive a Qualified Joint and Survivor Annuity in the amount of Defendant’s award. Thus, Plaintiff must elect benefits in the form of a Qualified Joint and Survivor Annuity upon retirement designating Defendant as surviving spouse beneficiary.
Death of Defendant: If the Defendant dies before the Plaintiff starts receiving benefits, the Defendant’s award shall revert to the Plaintiff.
