Iowa Administrative Code
Agency 495 - IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Chapter 16 - DOMESTIC RELATIONS ORDERS AND OTHER ASSIGNMENTS
Rule 495-16.2 - Domestic relations orders
Universal Citation: IA Admin Code 495-16.2
Current through Register Vol. 46, No. 19, March 20, 2024
This rule shall apply only to marital property orders. All support orders shall continue to be administered under rule 495-16.1(97B).
(1) Definitions.
"Alternate payee" means a spouse or former spouse, regardless of gender, of a member who is recognized by a domestic relations order as having a right to receive all or a portion of the benefits payable by IPERS with respect to such member.
"Benefits" means, for purposes of this rule and depending on the context, a refund, monthly allowance (including monthly allowance paid as an actuarial equivalent (AE)), or death benefit payable with respect to a member covered under IPERS. "Benefits" does not include dividends payable under Iowa Code section 97B.49 or other cost-of-living increases unless specifically provided for in a QDRO.
"Domestic relations order" means any judgment, decree, or order which relates to the provision of marital property rights to a spouse or former spouse, regardless of gender, of a member and is made pursuant to the domestic relations laws of a state.
"Member" means, for purposes of this rule, IPERS members, beneficiaries, and contingent annuitants.
"Qualified domestic relations order" or "QDRO" means a domestic relations order that divides the marital property of former spouses and assigns to a former spouse alternate payee the right to receive all or a portion of the benefits payable with respect to a member under IPERS and meets the requirements of this rule.
"Successor alternate payee" means a person or persons named in a domestic relations order prior to July 1, 2019, to receive the amounts payable to the former spouse alternate payee under the QDRO if the alternate payee dies before the member. Successor alternate payees must be named individuals, not a class of individuals, a trust or an estate.
"Trigger event" means a distribution or series of distributions of benefits made with respect to a member.
(2) Requirements.
a.
Mandatory provisions. A
domestic relations order is a QDRO if such order:
(1) Clearly specifies the member's name and
last-known mailing address, member identification number or social security
number, and the names and last-known mailing addresses and social security
numbers of alternate payees. This information shall be provided to IPERS on
IPERS' Confidential Information form;
(2) Clearly specifies a fixed dollar amount
or a percentage, but not both, of the member's benefits to be paid by IPERS to
the alternate payee or the manner in which the fixed dollar amount or
percentage is to be determined, provided that no such method shall require
IPERS to perform present value calculations of the member's accrued
benefit;
(3) Clearly specifies the
period to which such order applies;
(4) Clearly specifies that the order applies
to IPERS;
(5) Clearly specifies
that the order is for purposes of making a property division;
(6) Conforms IPERS with IRS reporting
requirements for distributions to successor alternate payees. Prior to July 1,
2019, the taxable portion and basis will be prorated to each respective
recipient if the payee is the alternate payee. If the payee is a successor
alternate payee, the taxable portion and basis will be borne by the member,
pursuant to IRC Pub. L. 99-514, 100 Stat. 2085, enacted October 22, 1986.
Effective July 1, 2019, a domestic relations order must conform IPERS with IRS
reporting requirements for distributions to alternate payees. The taxable
portion and basis will be prorated to each respective recipient; and
(7) Is clearly signed by the judge and filed
with the clerk of court. IPERS will consider an order duly signed if it carries
an original signature, a stamp bearing the judge's signature, an electronic
clerk-of-court stamp and judge's signature page via the electronic data
management system (EDMS) or is conformed in accordance with local court
rules.
b.
Prohibited provisions. A domestic relations order is not a
QDRO if such order:
(1) Requires IPERS to
provide any type or form of benefit or any option not otherwise provided under
Iowa Code chapter 97B;
(2) Requires
IPERS to provide increased benefits determined on the basis of actuarial
value;
(3) Requires the payment of
benefits to an alternate payee which are required to be paid to another
alternate payee under another order previously determined by IPERS to be a
QDRO;
(4) Requires any action by
IPERS that is contrary to its governing statutes or plan provisions;
(5) Awards any future benefit increases that
are provided by the legislature, except as provided in subparagraph
16.2(2)"c"(2);
(6)
Requires the payment of benefits to an alternate payee prior to a trigger
event; or
(7) Appoints a successor
alternate payee after June 30, 2019.
c.
Permitted provisions. A
QDRO may also:
(1) If a trigger event has not
occurred as of the date the order is received by IPERS, name an alternate payee
as a designated beneficiary or contingent annuitant or require the payment of
benefits under a particular benefit option, or both;
(2) Specify that the alternate payee shall be
entitled to a fixed dollar amount or percentage of dividend payments, or
cost-of-living increase or any other postretirement benefit increase to the
member (all known as dividend payments), as follows:
1. If the court order awards a fixed dollar
amount of benefits to the alternate payee, the dollar amount of dividend
payments to be added or method for determining the dollar amount shall be
stated in the court order or an award of a share of dividend payments shall be
given no effect; and
2. If the
court order awards a specified percentage of benefits to the alternate payee,
IPERS shall add dividends to the alternate payee's share of the retirement
allowance as necessary to keep the alternate payee's share of payments at the
percentage specified in the court order;
(3) Bar a vested member from requesting a
refund of the member's accumulated contributions without the alternate payee's
written consent. If a member applies for a refund, a consent form will be sent
to the alternate payee at the address of record at IPERS. The completed consent
form must be received by IPERS within 60 days. If returned undeliverable or no
response is received, the member's portion of the refund amount will be payable
to the member. If returned marked "no consent," the refund will not be payable
to either the member or alternate payee;
(4) Allow benefits to be paid to an alternate
payee based on a period of reemployment for a retired member.
(3) Administrative provisions.
a. IPERS uses the shared payment method for
payments under a domestic relations order. IPERS will not create a separate
account for the alternate payee or any successor alternate payee(s). Payment to
the alternate payee (or successor alternate payee(s)) shall be in a lump sum if
the member's benefits are paid in a lump sum distribution or as monthly
payments if the member's benefits are paid under a retirement option. A member
shall not be able to receive an actuarial equivalent (AE) under Iowa Code
section 97B.48(1) unless the total benefit payable with respect to that member
meets the applicable requirements. All divisions of benefits shall be based on
the gross amount of monthly or lump sum benefits payable. Federal and state
income taxes shall be deducted from the member's and former spouse alternate
payee's respective shares and reported under their respective federal tax
identification numbers. Unrecovered basis shall be allocated on a pro rata
basis to the member and alternate payee. Federal and state income taxes shall
be deducted from the member's gross payment when a successor alternate payee(s)
receives a payment. Federal and state income taxes shall be reported under the
member's federal tax identification number. Unrecovered basis shall be
allocated to the member.
b. The
alternate payee shall not be entitled to any share of the member's death
benefits except to the extent such entitlement is so provided in a QDRO or in a
beneficiary designation filed subsequent to the dissolution.
c. Upon acceptable proof from a member that a
preretirement divorce is final, a member may submit a new
enrollment/beneficiary designation form to IPERS. IPERS will place the new
designation in the member's record. However, if a domestic relations order is
later received and qualified by IPERS, the provisions of the QDRO shall be
deemed, except as revoked or modified in a subsequent QDRO, to operate as a
beneficiary designation, and shall be given first priority by IPERS in the
determination and payment of suchmember's death benefits. Death benefits
remaining after payments are made as required by the QDRO, to the extent
possible, shall then be made according to the terms of the member's most recent
beneficiary designation. If a QDRO does not contain a form of benefit paragraph
requiring the member to select a specific IPERS option at retirement, the
member is allowed to select any option at retirement, including an option that
does not provide for payment of postretirement death benefits. Once a divorce
is final postretirement, a member may submit a new enrollment/beneficiary
designation form to IPERS if the member has retired under Option 1, 2 or 5,
unless otherwise specified in a QDRO.
d. If an alternate payee has been awarded a
share of the member's benefits and dies before the member, the alternate
payee's entire share shall be restored to the member unless otherwise specified
in the order and in the manner required under this rule. In order for the
alternate payee's entire share to be restored to the member, IPERS requires
proof of death of the alternate payee in the form of a death certificate. If a
death certificate cannot be obtained, IPERS may rely on such resources as it
has available, including but not limited to records from the Social Security
Administration, bureau of health statistics, IPERS' own internal records, or
reports derived from other public records, and other departmental or
governmental records to which IPERS may have access.
e. A named successor alternate payee may
waive current or future rights to payments to which the successor alternate
payee would have otherwise been entitled. The funds waived by a successor
alternate payee shall revert to the member. The waiver of rights shall occur
prior to the receipt of any payment from IPERS to the successor alternate payee
and shall be in the form of a filed and signed court order. The waiver of
rights by a successor alternate payee is binding and shall serve to indemnify
IPERS from all liability to beneficiaries, heirs, or other claimants for any
waiver executed by a successor alternate payee. The waiver must be received by
IPERS no later than nine months after the date of death of the alternate payee
or the date on which the successor alternate payee reaches age 21, whichever
occurs later.
f. An alternate payee
shall not receive a share of dividends or other cost-of-living increases,
unless so provided in a QDRO.
g.
The CEO, or CEO's designee, shall have exclusive authority to determine whether
a domestic relations order is a QDRO. A final determination by the CEO, or
CEO's designee, may be appealed in the same manner as any other final agency
determination under Iowa Code chapter 97B.
h. A person who attempts to make IPERS a
party or requires IPERS to appear as a witness to a domestic relations action
in order to determine an alternate payee's right to receive a portion of the
benefits payable to a member shall be liable to IPERS for its costs and
attorney's fees.
i. A domestic
relations order shall not become effective until IPERS qualification. If a
member is receiving a retirement allowance at the time a domestic relations
order is deemed qualified by the system, the order shall be effective only with
respect to payments made after the appropriate appeal period has elapsed or
been waived by the signature of both parties or their respective counsel.
Payment to the alternate payee will be withheld from the member's next monthly
payment after the date the alternate payee's application is mailed by IPERS. If
the member is not receiving a retirement allowance at the time a domestic
relations order is qualified by IPERS and subsequently applies for a refund or
monthly allowance, or dies, no distributions shall be made until the respective
rights of the parties under the domestic relations order are determined by
IPERS. If IPERS has placed a hold on the member's account following written or
verbal notification from the member, member's spouse, or either party's
respective legal representative, and no further contacts are received from
either party or their representatives within the following one-year period, or
IPERS has not received and qualified a domestic relations order within that
time period, IPERS shall release the hold.
j. IPERS and its staff shall have no
liability for making or withholding payments in accordance with the provisions
of this rule.
k. IPERS has no duty
or responsibility to search for alternate payees. Alternate payees must notify
IPERS of any change in their mailing addresses. IPERS shall mail the alternate
payee an application once an application for a distribution has been received
from the member and considered a complete application by IPERS. For monthly
benefit applications, the alternate payee is eligible for monthly payments as
of the member's first month of entitlement.
l. If a QDRO requires the member to select an
option with joint and survivor provisions (Option 4 or 6) and name the
alternate payee as contingent annuitant, the order must state the percentage in
Option 4 or 6 to be payable to the alternate payee as contingent annuitant (the
currently available percentages under Option 4 or 6 are 25, 50, 75 and 100
percent). Acceptable birth proof for the alternate payee as the named
contingent annuitant, pursuant to 495-subrule 11.1(2), must also be provided to
IPERS prior to approval of the order by IPERS.
m. For both lump sum and monthly payments,
the alternate payee's tax withholding and rollover elections, if eligible, must
be received before the first or current month's benefit is certified for
payment or IPERS will use the applicable default tax withholding
elections.
n. If an order that is
determined to be a QDRO divides a member's account using a service factor
formula and the member's IPERS benefits are based on a number of quarters less
than the member's total covered quarters, notwithstanding any terms of the
order to the contrary, IPERS shall limit the number of quarters used in the
numerator and the denominator of the service fraction to the number of quarters
actually used in the calculation of IPERS benefits, not to exceed 120 quarters
for special service members and 140 quarters for regular and hybrid members.
IPERS will not accept or administer a service factor formula fraction in excess
of 1.
o. Service credit that is
purchased during the period when the member is married to the alternate payee
shall be added to the numerator and the denominator of the service fraction
when calculating the service factor pursuant to a domestic relations order.
Service credit that is purchased during a period when the member is not married
to the alternate payee shall only be added to the denominator of the service
fraction when calculating the service factor pursuant to a domestic relations
order. Under no circumstances shall the number of quarters in the denominator
be more than the number of quarters used to calculate the member's benefit.
Service purchase after retirement shall not increase or decrease the alternate
payee's payment amount that was deducted and was payable at the time of
retirement.
p. The parties or their
attorneys in a dissolution action involving an IPERS member shall decide
between themselves which attorney will submit a proposed domestic relations
order to IPERS for review. With the initial submission of an order for review,
drafters must also submit a completed, signed, and dated Confidential
Information (CI) form; in addition, every draft order submitted for review must
be accompanied by a freshly signed and dated Administrative Rule Compliance for
QDROs (ARC) form. Both the member and alternate payee, or their respective
counsel, must sign and date the ARC form. Both forms must be wet signed;
however, attorneys or pro se filers may sign with their electronic (eFile or
EDMS) signatures. A rejection under this paragraph shall not preclude IPERS
from placing a hold on a member's account until the status of a proposed order
as a QDRO is resolved or the hold is released pursuant to the terms of
paragraph 16.2(3)"i."
q. If a member has filed for and is receiving
monthly pension benefits, or wishes to file an application for retirement or a
refund and has a qualified domestic relations order pending on the member's
account, the parties (the member and the alternate payee or their counsel of
record) may execute a waiver of the 30-day appeal period following review and
qualification of the member's domestic relations order, using a form approved
by the system.
r. If a member with
an IPERS-approved QDRO is receiving a distribution according to a qualified
benefits arrangement (QBA), the alternate payee shall share in the distribution
to the member unless the order specifically states otherwise.
Disclaimer: These regulations may not be the most recent version. Iowa may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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