Sample Separation Agreement Language
Corporate & Union Pensions (Defined Benefit Plans)
This model may be used for monthly pension plans provided by corporate employers and many unions. Like all models it will need to be modified to fit the exact circumstances of the parties’ agreement and the rules of the plan.
a. The [Wife / Husband] is a Participant in the [official plan name] (“Plan”). For purposes of dividing marital property, the [Wife / Husband] is an Alternate Payee who is granted a portion of the Participant’s Plan benefits as described below.
CHOOSE ONE OF THE FOLLOWING FOR PARAGRAPH b:
For a Shared Interest
b. Amount of Benefits Assigned: The parties shall cooperate in the preparation of a Domestic Relations Order (QDRO) so that the HUSBAND / WIFE shall receive a shared interest of (_____________ %) of the marital portion of the HUSBAND’s / WIFE’s …..service …..disability monthly pension. The marital portion of the benefit shall be determined in accordance with the New York State Court of Appeals decision in Majauskas v Majauskas, to wit: the benefit multiplied by a fraction where the numerator is the number of years, partial years and/or months of credited service earned during the marriage, and the denominator is the total number of years, partial years and/or months of credited service earned as of the date the Participant commences benefits. For purposes of determining the dates under Majauskas, the date of the marriage of the parties is ___________________ and the date of cessation of marriage service is _______________________________ .
For a Separate Interest
b. Amount of Benefits Assigned: The parties intend to award the Alternate Payee a separate interest in the Participant’s vested accrued benefit and the parties shall cooperate in the preparation of a Domestic Relations Order (QDRO) so that the HUSBAND / WIFE shall receive a separate interst of (_____________ %) of the marital portion of the HUSBAND’s / WIFE’s …..service …..disability monthly pension. The marital portion of the benefit shall be determined in accordance with the New York State Court of Appeals decision in Majauskas v Majauskas, to wit: the benefit multiplied by a fraction where the numerator is the number of years, partial years and/or months of credited service earned during the marriage, and the denominator is the total number of years, partial years and/or months of credited service earned as of the date the Alternate Payee commences benefits. For purposes of determining the dates under Majauskas, the date of the marriage of the parties is ___________________ and the date of cessation of marriage service is _______________________________ . The payments to the Alternate Payee may commence at the earliest time permitted by the Plan.
It is understood that the plan administrator utilizes a totally severed approach to administering their separate interest QDROs and the participant’s death, either before or after retirement, will not affect the alternate payee’s rights to benefits as set forth herein.
c. Early Retirement Subsidies/Supplements and COLAs: The Alternate Payee is assigned a pro rata share (determined in the same manner as in Item 1 above) of any early retirement subsidies or supplements, cost-of-living adjustments or other post-retirement benefit increases, or any interim or temporary benefits that the Participant receives from the Plan. This includes a recalculation should the Participant retire after the Alternate Payee has already commenced benefits.
d. Participant’s Death After Retirement: If the Plan does not permit the Alternate Payee to elect a form of payment based on his/her life expectancy, the Participant shall elect a joint and survivor annuity to the extent necessary to protect the Alternate Payee’s assigned benefit in the event the Participant dies before the Alternate Payee.
e. Participant’s Death Before Retirement: The Participant shall designate the Alternate Payee as his/her surviving spouse for purposes of any preretirement survivor annuity, but only to the extent necessary to protect the Alternate Payee’s assigned benefit in the event the Participant dies prior to his/her benefit commencement date.
f. Alternate Payee’s Death: If the Alternate Payee dies prior to his/her benefit commencement date, the Plan shall distribute the Alternate Payee’s assigned benefit to his/her beneficiary(ies) or, if the Plan does not permit such distribution, the assigned benefit shall revert to the Participant. If the Alternate Payee dies after commencement of his/her benefit, the Plan will pay remaining benefits, if any, in accordance with the form of benefit the Alternate Payee elected.
g. Loans: Any loans …..shall …..shall not be added back in determining the…..HUSBAND’s …..WIFE’s share of the pension.
h. QDRO Preparation: The [Wife / Husband] shall prepare a qualified domestic relations order (“QDRO”), as defined in Section 206 of the Employee Retirement Income Security Act of 1974, that is consistent with this Agreement. The parties agree to fully cooperate and provide any plan documents or authorization necessary to complete the QDRO process. The parties shall submit the QDRO to the Plan’s administrator for review and approval, and shall share equally any fees for the Plan or its representative to review the QDRO.
i. Continued Jurisdiction: The court shall retain jurisdiction to amend the provisions of this Agreement, to amend the QDRO, and to issue new orders to enforce the parties’ intent regarding the Participant’s Plan benefits that are assigned to the Alternate Payee.
j. Participant’s Actions: The Participant shall not act, or refuse to act, in any manner that could diminish the Alternate Payee’s right to the Plan benefits assigned in this Agreement and in the related QDRO. If the Participant does take such action or inaction, the Participant shall make payments directly to the Alternate Payee to the extent necessary to restore the Alternate Payee to the position he/she would otherwise have been in without the Participant’s action/inaction.
k. Other Plans: The parties each represent that they have an interest in the following additional retirement plans:
HUSBAND’S / WIFE’S PLANS:
[list names of other plans here]
WIFE’S / HUSBAND’S PLANS
[list names of other plans here]
l. The parties represent that they do not have an interest in any plans not mentioned in paragraphs a to k above.
m. Except as provided in paragraphs a to j above, the parties waive any interest they may have in any retirement plan in the name of the other party, listed in paragraph k above, as further provided in this paragraph m.
The parties shall execute any spousal waivers that may be required under the Retirement Equity Act of 1984 or any existing or similar federal or state statute that may be enacted. This paragraph is intended to substitute for any other statement, prepared form or document which might be required by any plan, fund, trust, administrator, trustee or similar entity or person, so that each party may receive said benefits as if the parties never married.
Each party (as “Releasee”) hereby elects, and the other party (as “Releasor”) hereby consents to, a waiver and release of any and all benefits, including, without limitation, the qualified joint and survivor annuity benefit form of benefit under all pension, retirement, death benefit, stock bonus or profit-sharing plans, systems or trusts (hereinafter collectively called “employee plans”) of which the Releasor is, or may become, a participant, beneficiary or member. This waiver and release is meant, without limitation, as a waiver pursuant to Internal Revenue Code Section 417(a). If requested, the Releasor shall consent in writing, in any form requested by the Releasee, to any such election. The spousal consent of the Releasor set forth herein is irrevocable. Each party acknowledges that he/she has received an explanation of a qualified pre-retirement survivor annuity in accordance with Internal Revenue Code Section 417(a)(3)(b) and that the effect of this consent is to deny Releasor any right, interest or annuity in, to, or from the Releasee’s benefits under any employee benefit plan, now or in the future.
The Releasor acknowledges and hereby consents to the Releasee’s election that upon Releasee’s death, all death benefits under any employee plan of the Releasee will be paid to such person as Releasee may have designated at any time before the execution of this Agreement or may designate from time to time hereafter, in Releasee’s sole and unfettered discretion.
If the Releasor shall receive any part of or benefits from the Releasee’s account or accrued benefit in any employee plan, other than pursuant to a beneficiary designation executed after the date hereof by the Releasee which designation expressly names the Releasor as a beneficiary, Releasor shall promptly turn same over to the Releasee (or if the Releasee if not then living, to his/her designated beneficiaries under said employee plan, if any, or if there is no designated beneficiary, to the Releasee’s estate).
The parties intend that this Agreement be accepted as a spousal consent by each of them as Releasee to a waiver of a qualified pre-retirement survivor annuity pursuant to Internal Revenue Code Section 417(a).
n. Nothing herein shall be deemed to waive either party’s Social Security rights.