QDROs For Unmarried Cohabitants?

by Stinson Leonard Street - Employee Benefits & Compensation

Sponsors of qualified retirement plans know that, generally speaking, plan benefits cannot be taken from a participant through legal process or otherwise be assigned to anyone other than the participant. There is an exception for payments in connection with a divorce under a qualified domestic relations order or QDRO. Qualified retirement plans must honor QDROs that meet statutory requirements. The QDRO must be an order relating to the “child support, alimony payments, or marital property rights” of a “spouse, former spouse, child or other dependent of a participant,” issued pursuant to a state domestic relations law.

A recent decision of the Supreme Court of Alaska concluded that a participant’s pension benefit under a multiemployer pension plan was subject to division between the participant and the woman with whom he had cohabitated for sixteen years and with whom he had raised children. The two had never married. The court cited a Ninth Circuit decision relating to Washington law but concluded that Alaska law also provided “marital property rights” to cohabitants and provided for property distributions when a cohabitant relationship dissolved. The court then concluded that the woman qualified as an alternate payee because she was a “dependent” of the participant. The court relied upon the definition of “dependent” in the tax code and noted that the participant and the woman had shared a residence and that the participant had claimed the woman as a dependent on his taxes at least some of the years they resided together.

The definition of “dependent” in the Internal Revenue Code is much more complicated than the single section cited by the court requiring that an individual share a principal place of abode with a taxpayer and be a member of the taxpayer’s household to constitute the taxpayer’s dependent. In addition to meeting those requirements, the individual must also be supported by the taxpayer and cannot, in most cases, have income in excess of the dependency exemption. Those elements of the dependency definition were not mentioned at all in the court decision. On the facts given in the opinion, it is unclear whether the woman met the “dependent” definition under federal tax law with respect to the participant.

The decision addressed property to be divided under Alaska law when the cohabitants ceased living together. To that extent, the court is entitled to interpret Alaska law without regard to the technicalities of federal tax law. However, the court’s interpretation of Alaska law might not be an interpretation accepted by the pension plan, which would need to approve a QDRO before it was implemented. Perhaps recognizing that the pension plan may view the situation differently, the court included the following as a final footnote to its decision:

If there is concern that the pension administrator will refuse to honor the domestic relations order even in light of [the Ninth Circuit decision] discussed [above], the court may require an equalization payment from [the participant] to [the woman] reflecting the present value of her share of the union pension.

In other words, although the Alaska courts may take the value of the union pension into account in splitting the property, the court was not confident that the pension plan would allow the pension to be split with an alternate payee who had never been married to the participant. Absent better proof of tax dependency status, the pension plan may well be reluctant to approve a QDRO for former cohabitants.



DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Stinson Leonard Street - Employee Benefits & Compensation | Attorney Advertising

Written by:

Stinson Leonard Street - Employee Benefits & Compensation

Stinson Leonard Street - Employee Benefits & Compensation on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.