Family Law Orders and Qualified Domestic Relations Orders

MPERA requires a Family Law Order (FLO) or a Qualified Domestic Relations Order (QDRO) approved by the court to split the retirement benefits between the member and the former spouse.  FLOs have more restrictive criteria under Montana law (§ 19-2-907, MCA) than QDROs have under federal law (26 U.S.C . §72, et seq. and 29 U.S.C. §1001, et seq.)  FLOs are used for distribution of benefits under all systems covered by MPERA, except for the 457(b) Deferred Compensation, then a QDRO is used.

Family Law Orders

The Montana Public Employees' Retirement Board has established rules relating to FLOs that outline the minimum requirements needed for qualification.  Sample FLOs are available for all MPERA administered retirement systems. Each defined benefit system has unique requirements, please contact MPERA for the correct template for the member's retirement system.

Under the MPERA-administered Defined Benefit Retirement Plans (PERS, FURS, HPORS, MPORS, JRS, GWPORS, SRS) distributions cannot be made to an alternate payee until the member withdraws their retirement account, begins receiving a retirement benefit or dies. 

FLO Handbook for the following systems:

• Public Employees' Retirement System (PERS)
• Game Wardens' and Peace Officers' Retirement System (GWPORS)
• Sheriffs' Retirement System (SRS)
• Judges Retirement System (JRS)

FLO Handbook for the following systems:

• Municipal Police Officers' Retirement System (MPORS)
• Firefighters' Unified Retirement System (FURS)
• Highway Patrol Officers' Retirement System (HPORS)

The PERS Defined Contribution Retirement Plan (PERS DCRP) is another retirement system managed by MPERA and administered by Empower Retirement.   The PERS DCRP has its own administrative rules regarding FLO administration.  With the advent of the Pension Protection Act of 2006, retirement plans are no longer required to await a distributable event (termination, retirement, or death) to distribute a PERS DCRP account to an alternate payee. 

The PERS DCRP requires distribution as soon as administratively feasible. This means that after a PERS DCRP FLO is approved by the Board, the approved document is sent to Empower.  Empower will then send the distribution paperwork to the alternate payee so that they can choose how to receive the funds.

Contact MPERA for the PERS DCRP handbook and FLO templates.

Qualified Domestic Relations Orders

The Montana Public Employees' Retirement Board has established rules relating to QDROs that outline the minimum requirements needed for qualification. The QDRO handbook and template are available for members with a 457(b) plan by contacting MPERA.

Terms

Family Law Order (FLO) - a judgment, decree, or order of a court of competent jurisdiction under Title 40 concerning child support, parental support, spousal maintenance, or marital property rights that includes a transfer of all or a portion of a member's payment rights in a retirement system to an alternate payee in compliance with this section and with section 414(p) of the Internal Revenue Code, 26 U.S.C. 414(p).

Qualified Domestic Relations Order (QDRO) - is a document designed to divide a participant's 457(b) account to an alternate payee.

Defined Benefit Retirement Plan (DBRP) – is a retirement plan in which an member's benefit payments are calculated according to length of service and the salary earned at retirement.

PERS Defined Contribution Retirement Plan (PERS DCRP) – members’ benefits will depend on the size of their individual account balances at retirement.

457(b) Deferred Compensation Plan – a voluntary plan to supplement the participant's retirement. The participant can choose to contribute a portion of their paycheck either pre or post-tax (ROTH).

Guaranteed Annual Benefit Adjustment (GABA) –  An annual increase to the member's retirement benefit if they are eligible.  

Defined Sum Family Law Order – a FLO  which directs set payments to an alternate payee until a defined sum is paid in full. A "defined sum" must designate a specific total dollar amount to be paid to the alternate payee in the form of a fixed dollar amount payable for a designated maximum number of months.

Proportionate Family Law Order – a FLO which provides payment by designating a fixed percentage or a formula on how to collect payment.

Primary Beneficiary – designated to receive payments upon death of a member.

Contingent Beneficiary – designated to receive payments if all primary beneficiaries are deceased.

Survivor – the designated or statutory beneficiary of a member who dies while in service.

Alternate Payee – means any spouse, former spouse, child or other dependent of a member who is recognized by a FLO or QDRO as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such member.