QDRO Survivor & Death Benefits in QDROs 3

Question 1

When an alternate payee is awarded survivor annuity rights in a QDRO, what obligation does this create for the plan administrator?

Accepted Answer

The administrator must maintain adequate actuarial reserves for the alternate payee's potential future survivor benefit

Answer

The administrator must notify the participant's current employer immediately

Answer

The administrator must obtain court approval each time a survivor payment is made

Answer

The administrator must convert all defined benefits to defined contribution accounts

Question 2

An alternate payee who is awarded survivor annuity rights under a QDRO is formally referred to as:

Accepted Answer

A surviving annuitant or surviving spouse equivalent

Answer

A contingent remainder beneficiary

Answer

A co-participant with derivative rights

Answer

A joint tenancy interest holder

Question 3

Which of the following drafting failures would most likely cause a QDRO's survivor benefit award to be ineffective?

Accepted Answer

The QDRO does not include language treating the alternate payee as the surviving spouse for survivor benefit purposes

Answer

The QDRO was entered after the divorce decree was finalized

Answer

The alternate payee resides in a different state than the participant

Answer

The plan is a governmental plan rather than an ERISA-covered private plan

Question 4

Under the shared payment approach in a defined benefit plan QDRO, what happens to the alternate payee's payments upon the participant's death?

Accepted Answer

Payments cease upon the participant's death unless survivor benefits are separately specified in the QDRO

Answer

Payments continue to the alternate payee for the remainder of the alternate payee's lifetime

Answer

Payments automatically double to compensate for the alternate payee's lost income

Answer

Payments convert to Social Security survivor benefit equivalents

Question 5

Why does the 'separate interest' approach generally provide better survivor benefit protection for the alternate payee compared to the 'shared payment' approach?

Accepted Answer

It creates an independent benefit based on the alternate payee's own life, eliminating dependency on the participant's survival

Answer

It guarantees the alternate payee a percentage of the participant's survivor annuity payments

Answer

It requires the plan to purchase a separate commercial life insurance policy for the alternate payee

Answer

It converts the defined benefit plan into a defined contribution account for the alternate payee

Question 6

If a participant remarries after a QDRO has been issued establishing the former spouse's survivor rights, how are the new spouse's QPSA rights prioritized?

Accepted Answer

The new spouse's QPSA rights are subordinate to the previously established QDRO survivor rights

Answer

The new spouse's QPSA rights automatically supersede the former spouse's QDRO survivor rights

Answer

The new spouse and alternate payee have equal priority in all survivor benefit claims

Answer

The new marriage automatically triggers plan termination of the existing QDRO

Question 7

When calculating the actuarial reduction for a survivor annuity under a QDRO, which factor is most critical to the calculation?

Accepted Answer

The age difference between the participant and the alternate payee

Answer

The participant's current annual salary at the time of divorce

Answer

The number of years the couple was married before divorce

Answer

The plan's actual investment return during the prior calendar year