previous domestic relations order involving the same participant and alternate payee, as long as the new
domestic relations order itself meets the statutory requirements. Indeed, the purpose of section 206(d)
(3) is to permit the division of marital property on divorce in accordance with the directions of the State
authority with jurisdiction to achieve the appropriate disposition of property upon the dissolution of a
marriage. Where a State authority reasserts jurisdiction over a marital dissolution and issues an order
changing a previously established property allocation, it would appear contrary to this purpose to create
additional requirements, beyond what is specied in section 206(d)(3) of ERISA, that would thwart the
exercise of that authority. Accordingly, provided that a domestic relations order otherwise meets the
requirements of section 206(d)(3) of ERISA, a plan administrator may not fail to qualify the domestic
relations order merely because the order changes a prior assignment to the same alternate payee.
1
Thus,
it is the Department’s view that a plan administrator may determine, consistent with the requirements
of section 206(d)(3), that a domestic relations order is qualied even if it would supersede or amend a
pre-existing QDRO assigning the same participant’s benets to the same alternate payee.
The plan administrator in this case has made apparent its intention to seek repayments from, or
to withhold future payments to, the alternate payee of amounts paid out in accordance with the 1997
Order. We do not believe that, under these facts, the plan administrator would have the authority to
do so. As a general maer, a plan administrator making QDRO determinations has duciary duties
applicable to the determination process. The administrator has a duty under section 206(d)(3)(G) of
ERISA to determine whether a domestic relations order is a QDRO within a reasonable time after receipt
and to promptly notify the participant and each alternate payee of the determination. The administrator
has a duty under section 404(a)(1) of ERISA to act prudently and solely in the interests of the plan’s
participants and beneciaries, and to follow the plan’s QDRO procedures unless they conict with the
provisions of ERISA.
Because, in this case, the plan administrator had previously determined the 1997 Order to be a
QDRO, the plan was required to make benet payments in accordance with the 1997 Order. The plan
administrator took no steps to preserve the amounts that would be aected by the 2002 Order during
its consideration of that order’s qualied status, but continued to make the payments required by the
1997 Order. Subparagraph (I) of section 206(d)(3) of ERISA provides that, if a plan duciary, acting
in accordance with its duciary duties, treats a domestic relations order as being qualied, and pays
out benets in accordance with its determination and the 18-month segregation rules of subparagraph
(H), the plan’s obligations to the participant and any alternate payee are discharged with respect to
such payments.
2
Accordingly, under these circumstances it is appropriate to treat the 2002 Order as
prospective only. There does not appear to be grounds on which the plan could seek repayment from
the alternate payee of the benets paid out in accordance with the 1997 Order.
3
1
Section 206(d)(3)(D)(iii), which provides that a domestic relations order may be qualied only if it does not
require the payment of benets to an alternate payee that are required to be paid to another alternate payee
under a pre-existing QDRO, does not apply here, where there is only one alternate payee.
2
Although § 206(d)(3)(H) requires an administrator to segregate amounts that would be payable to an alter-
nate payee under an order for 18 months pending determination of the order’s qualied status, that section
does not require segregation of amounts that would be transferred from the alternate payee (per a previously
recognized QDRO) to the participant. Nonetheless, the administrator may have been able, under these facts,
to arrange a voluntary escrow of the amounts in question, since both the participant and the alternate payee
apparently sought the change in assignment.
3
Nothing in this leer is intended to alter or have any eect on the federal tax consequences under the Internal
Revenue Code (the Code) to the participant and alternative payee of distributions under either the 1997 Order
or the 2002 Order.
Appendix A 73