2 AAC 35.325 - Defined benefit plan qualified domestic relations orders (QDRO's)

(a) After a member covered under AS 39.35.095-39.35.680 is divorced or the member's marriage is dissolved, the member's former spouse has no individual rights or entitlements to benefits from the system, but may, under a qualified domestic relations order, share in the stream of benefit payments paid to the member. To be valid and enforced by the administrator, a qualified domestic relations order must conform to both the requirements of AS 39.35 and the requirements of the United States Internal Revenue Code that the system must comply with in order to maintain its federal tax-qualified status.

(b) An alternate payee

(1) may only be the former spouse of a member who has been named by an order of a court of competent jurisdiction to receive all or a portion of the member's retirement benefit;

(2) may not elect benefit options, but may only share in benefit options elected by the member;

(3) may not name survivors or beneficiaries to the alternate payee's portion of the member's benefit;

(4) will not be provided medical or insurance benefits at the system's expense but may purchase coverage from the system at the full calculated cost to the system; the alternate payee must elect to purchase the coverage within 60 days after appointment to benefits.

(c) The administrator shall review all domestic relations orders that the administrator receives, and shall reject a domestic relations order that does not meet the requirements of AS 39.35 or this chapter. A qualified domestic relations order that is accepted by the administrator is effective on the first day of the month following the month in which the order is accepted, or on the date of retirement, whichever is later. The administrator will accept only a domestic relations order that is prospective. The administrator will reject an order that

(1) purports to have a retroactive effective date;

(2) orders payment of the alternate payee's benefits to someone other than the member upon the death of the alternate payee;

(3) orders payment of benefits to an alternate payee, other than survivor benefits, after the death of the member.

(d) The administrator will approve a domestic relations order that orders payment of a monthly benefit to an alternate payee only if the alternate payee's portion of the member's monthly stream of benefit payments is expressed as a set monthly dollar amount, as a percentage of the monthly benefit payment, or as a monthly formula based on a defined period of time divided by the member's total years of credited service.

(e) Unless a qualified domestic relations order specifically states otherwise, the administrator will follow the following rules in implementing qualified domestic relations orders:

(1) no death or survivor benefits shall be paid to the alternate payee if the member dies before retirement;

(2) a member may not elect a survivor option at the time of retirement naming an alternate payee as a beneficiary;

(3) if a survivor option must be elected by the member at the time of retirement, and the member does not, and is not required to, elect a specific option, the member shall be deemed to have elected the 50 percent joint and survivor option under AS 39.35.450(a)(2);

(4) any Alaska cost-of-living allowance that is payable under AS 39.35.480 and all post-retirement pension adjustments under the current or any former versions of AS 39.35.475 shall be divided between the member and the alternate payee in the same proportion as the base benefit is divided;

(5) the cost of providing a joint and survivor benefit for the alternate payee will be equally shared by the member and the alternate payee, regardless of the split of the benefit entitlement; in this paragraph; "the cost of providing a joint and survivor benefit" means the monthly difference between what the member's regular retirement benefit would be, without the actuarial reduction for a joint and survivor benefit and the member's actual benefit, after the actuarial reduction necessitated by the joint and survivor option;

(6) the average monthly compensation determined using a member's entire career will be used to calculate the alternate payee's entitlement, whether or not the member and the alternate payee were married during the entire time;

(7) remarriage of the alternate payee does not in any way reduce or eliminate the alternate payee's entitlement to benefits.

(f) If a member divorces after the member has retired or if a member's marriage is dissolved after the member has retired,

(1) the benefit selections made by the member at the time of retirement remain in force;

(2) the member's spouse at the time of retirement will retain sole rights to survivor benefits after the member's death if a survivor option was elected at retirement, except to the extent that a qualified domestic relations order approved before the member's retirement requires payment of survivor benefits to an alternate payee; and

(3) the administrator will not accept a domestic relations order that purports to alter the benefit selections made by the member at the time of retirement.

(g) A lump sum payment to an alternate payee under a qualified domestic relations order may be made only if the member elects a full withdrawal from membership in the Public Employees' Retirement System. Lump sum entitlements in a qualified domestic relations order must be stated either as a specific dollar amount or as a specific percentage of the member's contribution account.

(h) A qualified domestic relations order affecting disability benefits under AS 39.35.400 and AS 39.35.410 shall be accepted by the administrator only after the member has been appointed to disability.

Notes

2 AAC 35.325

Eff. 2/13/2004, Register 172; readopt 7/20/2006, Register 179; am 1/13/2010, Register 193

Effective 7/20/2006, Register 179, the Department of Administration readopted 2 AAC 35.325, without change, to affirm the validity of that section following statutory amendments made in ch. 9, FSSLA 2005. Chapter 9, FSSLA 2005 eliminated the Public Employees' Retirement Board, and largely transferred the board's authority to adopt regulations in 2 AAC 35 to the commissioner of administration.

Even though the adoption of 2 AAC 35.325 was effective 2/13/2004, it was not published until Register 172, January 2005.

Authority:AS 39.35.003

AS 39.35.455

AS 39.35.480

AS 39.35.500

AS 39.35.680