QDRO Guide

QUALIFIED DOMESTIC RELATIONS ORDERS

Chapter 286 of the Nevada Revised Statutes (NRS 286.6703) requires that a court judgment, decree or order, created to provide authority for PERS to split a benefit, be qualified by the Public Employees' Retirement System (PERS). To be qualified, the order must include all of the information provided in our sample Qualified Domestic Relations Order (QDRO) and must be in compliance with Chapter 286 of the Nevada Revised Statutes

Initially, PERS looks at the number of years of service you have in our System. Depending on the number of years of service credit the System will provide the following:

• If you have less than five years of service and no employee contributions, a letter stating you are not vested and you are not eligible for benefits or a refund of any monies.
  
  
• If you have less than five years of service but you have personal contributions, a letter stating you are not vested in our System. We will provide the dollar amount of your personal contributions and any mandated employer-paid monies that may be eligible for distribution if the member terminates from public employment and submits a request.
  
  
• If you have more than five years of service credit in PERS, a benefit estimate assuming termination of employment at the end of the current month with benefits beginning the first of the following month.

  In addition, PERS will provide an estimate assuming termination at the end of the current month with benefits beginning as of the first eligible age, based on the plan you are in and the number of years of service in PERS. Any personal contributions you have paid into the System as well as any mandated employer paid monies eligible for distribution will also be provided with this information.
  
  

• If you have not been married the entire time you have been a member of PERS, the System will provide you with an estimate showing the portion of the benefit to which a spouse/ex-spouse is entitled based on years of service earned during the marriage divided by total years of service in PERS.

PERS will not project service credit or salary in divorce estimates. These estimates are based on information posted to the account as of the date of the request.

1. After an estimate is provided, a current value is established for the retirement account. Current or present values can be calculated by an actuary or by a CPA. PERS cannot provide you with this calculation. Once a current value is calculated, another asset may be used to offset your PERS retirement, i.e. if the PERS account is valued at $50,000, then perhaps $50,000 equity in the house could be traded to offset the amount determined by the CPA or actuary to be the value of thePERS benefit.
   
   
2. Court documents may provide that at the time of retirement, the ex-spouse must receive a portion of the benefit but there is no requirement that the ex-spouse be designated as beneficiary to receive a continuing benefit after the death of the retiree. For example, if the member earned a benefit of $1,000 per month and the court awarded $200 per month to the ex-spouse, PERS would set up the retiree's benefit at $800 and the ex-spouse's benefit at $200. If the ex-spouse were to predecease the retiree, the retiree would begin receiving the full $1,000 beginning the first of the month following death. When the retiree passes away, payments to the ex-spouse cease.
   
   
3. Court documents may provide that at the time of retirement, the retiree must select a plan to provide a continuing benefit after his or her death and designate the ex-spouse as beneficiary. In this event, the retiree takes a reduction in the monthly benefit to provide this continuing coverage after the retiree's death. As an example only, the retiree might take a reduction from the $1,000 to $925 per month. The reduction in the benefit is based on the ages of the member and the beneficiary and the retirement option designated. In this example, the retiree would receive $925 per month for his/her lifetime. The ex-spouse would not receive a benefit until the retiree died. After the retiree's death, the ex-spouse would begin to receive a benefit which would continue until his/her death. If court documents provide that an ex-spouse is to be named as the beneficiary to receive a benefit after the retiree's death, a different beneficiary cannot be named at the time of retirement.
   
   
4. Court documents may provide that at the time of retirement, the retiree must take a reduction in the monthly benefit to provide a continuing benefit to the ex-spouse upon the retiree's death. In addition, the court documents may provide that the ex-spouse is to receive a portion of the monthly benefit during the retiree's lifetime. For example, the retiree takes a reduction from $1,000 to $925 per month to provide the continuing benefits to the ex-spouse upon the retiree's death. If the court awards $200 per month to the ex-spouse, PERS would set up the retiree's benefit at $725 and the ex-spouse's benefit at $200. If the ex-spouse is named as the beneficiary to receive a benefit after the retiree's death, the retiree cannot name a different beneficiary at the time of retirement.

In the first scenario above, PERS requires a certified copy of the Divorce Decree stating that the PERS benefit is the sole and separate property of the member.

In the second through the fourth scenarios, PERS requires a Qualified Domestic Relations Order (QDRO) to begin making payments to the ex-spouse at the time of retirement.

If there are no eligible survivors, no designation on the single survivor form, and there are personal contributions in the account, if the QDRO addressed this issue, then a portion of these monies will go to the ex-spouse.

Appendix B is a sample QDRO that complies with PERS' statutory requirements, as well as the checklist the System uses to determine whether the QDRO is in compliance with NRS Chapter 286.

• If the QDRO does not comply with statute, PERS will send a letter indicating the areas to be modified in the QDRO.
  
  
• If the QDRO complies, PERS will send a letter stating the QDRO complies and request a certified copy of the QDRO. The process is not complete until PERS receives a certified copy of the QDRO.
  
  
• If a certified copy of the QDRO is in the member's file, PERS will contact the ex-spouse when the member retires and will establish benefits for the ex-spouse in accordance with the QDRO.

To assist you and your attorney in preparing a QDRO that is in compliance with NRS Chapter 286, we are providing: Rules to Determine the Qualified Domestic Relations Court Orders and to Administer Distributions Under Such Orders (Appendix A); Draft Qualified Domestic Relations Order (Appendix B); and a QDRO Checklist (Appendix C).

The Public Employees' Retirement System (PERS) administers the retirement programs for eligible public employees of the State of Nevada and its political subdivisions. The programs are defined benefit plans funded by employer and employee and/or employer-paid contributions and investment returns.

Benefits accrue and are payable upon termination of employment either as a lump-sum refund of contributions if available or a monthly benefit. Monthly benefits are based on the formula specified in the Nevada Revised Statutes, i.e. years of service X 2.5% (for service earned prior to July 1, 2001 and 2.67% for service earned after July 1, 2001) X average compensation for the highest consecutive 36 months of reported salary.

PERS is exempt from the Qualified Domestic Relations Order ("QDRO") provisions of the 1984 Retirement Equity Act because the 1974 Employee Retirement Income Security Act ("ERISA") relates only to private sector plans. PERS is governed by Chapter 286 of the Nevada Revised Statutes which states:

NRS 286.6703

1. A person may submit a judgment, decree or order of a district court or the supreme court of the State of Nevada relating to child support, alimony or the disposition of community property to the executive officer or his designee for a determination of whether the judgment, decree or order entitles an alternate payee to receive from the system all or a portion of the allowance or benefit of a member or a retired employee.
   
   
2. The judgment, decree or order submitted to the executive officer must be signed by a district judge or by the justices of the supreme court and entered and certified by the clerk of the district court or the clerk of the supreme court.
   
   
3. The executive officer or his designee shall, in accordance with the rules prescribed by the board, determine whether the judgment, decree or order entitles the alternate payee to receive an allowance or benefit from the system. An alternate payee is entitled to receive an allowance or benefit from the system if the judgment, decree or order:
   
   
   1. Specifies clearly the names, social security numbers and last known mailing addresses, if any, of the member or retired employee and the alternate payee;
      
      
   2. Specifies clearly the amount, percentage or manner of determining the amount of the allowance or benefit of the member or retired employee that must be paid by the system to each alternate payee;
      
      

      For example: 50% x Years of Service Credit Earned During Marriage Total Years of Service Credit Earned

      
      
      
   3. Specifically directs the system to pay an allowance or benefit to the alternate payee;
      
      
   4. Does not require the system to provide an allowance or benefit to an alternate payee before the retirement of the member or the distribution to or withdrawal of contributions by a member.
      
      
   5. Does not require the payment of an allowance or benefit to an alternate payee before the retirement of a member or the distribution or withdrawal of contributions by a member.
      
      
4. For purposes of this subsection, "alternate payee" means a spouse, former spouse, child or other dependent of a member or retired employee who, pursuant to a judgment, decree or order relating to child support, alimony or the disposition of community property, is entitled to receive all or a portion of the allowance or benefit of a member or retired member from the system.

The statute authorizes the Public Employees' Retirement System (PERS) to adopt policies for the purpose of determining the qualified status of domestic relations court orders and to administer distribution of monies under the System pursuant to such orders. PERS adopted the following policies:

Policies

1. The system will acknowledge receipt of and honor written community property claims under NRS 123.240 against a member's contributions or benefits.
   
   
2. The system shall provide a written notice to the parties of the action of any determination that a judgment, decree or order is not in compliance with retirement statutes or rules adopted by the board.
   
   
3. The system shall advise the member and community property claimant that payment of contributions or benefits will be suspended until 90 days after the normal payment date so that claimant may obtain a court order regarding disposition. Any court order must be issued by a court that has acquired jurisdiction over the system and must name the system specifically.
   
   
4. Receipt of judgment, decree or order which does not comply with Chapter 286 of NRS, or the System's Official Policies, will serve as a temporary notice to the System of a forthcoming order regarding distribution of a member's benefit. Any attempts to obtain a refund of contributions or retirement allowance from such member's account will not be allowed for a period of 90 days in accordance with Policy 13.6.
   
   
5. If the judgment, decree, or order awards 100% of the benefit to the alternate payee, the alternate payee shall receive 100%, less a minimum check of $10.00 to the retired employee.
   
   
6. If a retired employee submits a judgment, decree or order awarding a portion of their benefit to an alternate payee, the benefit change will be effective with the next monthly check run following the receipt of the approved certified copy of the order.
   
   
7. If a judgment, decree, or order indicates that arrearages are owed by the member or retired employee to an alternate payee, the System will not participate in the collection of these arrearages. Arrangements for payment must be made between the two parties.
   
   
8. If a retired employee returns to work for a Nevada public employer in a position eligible for membership and fails to notify the System in a timely manner, as delineated in NRS 286.520(2)(a), the retired employee is responsible for reimbursing the System for all benefits that have been overpaid, including any benefits paid to his alternate payee.
   
   
9. If a retired employee's account is suspended for any reason, his alternate payee's account shall also be suspended. If the retired employee's account is canceled, the alternate payee is the beneficiary under one of the Options 2 through 7.
   
   
10. If the judgment, decree, or order indicates that the System is to pay the alternate payee for a specific period of time, it is the responsibility of the retired employee to apprise the System 30 days prior to the date the payments to the alternate payee are to stop or change.

Procedures
In addition, PERS adopted the following procedures:

1. If the order establishes payment to the Alternate Payee based on the period of marriage, the years of credited service earned during the marriage must be either (1) calculated in the order or (2) the marriage date given. The order must also specify whether the dollar amount or percentage applies to contributions or a future benefit on the basis of:

• The number of payments or period to which the order applies;
  
  
• The retirement plan (the Unmodified or one of six alternate plans) to which the order applies. Lacking this information, PERS will assume that the member has sole discretion in the choice of a retirement plan and/or whether to retire or take a refund.

2. Upon receipt of a properly issued order, the member and each Alternate Payee named in the order shall be timely notified. Such notice will be mailed to each person at the address included in the order.
   
   
3. Monies payable to an Alternate Payee will be paid in accordance with the benefit plan elected by the Participant.
   
   
4. The order may provide that if a member dies before the Alternate Payee begins receiving benefits and a refund of the contribution account is payable, the Alternate Payee will be eligible to receive the specified share of the refund.
   
   
5. PERS provides a defined benefit plan, and as such, the Alternate Payee may not assign these benefits.
   
   
6. After monthly payments begin to an Alternate Payee, the payments will cease when the first of the following occurs:
   
   

• The time period indicated in the order has expired;
  
  
• The death of the Participant;
  
  
• The death of the Alternate Payee.

7. There will be no segregation of retirement accounts.

   
   
   
8. The Alternate Payee must file a Tax Withholding Certificate or other form with PERS to provide instructions for federal income tax withholding.

Draft QDRO Form. The form provided in Appendix B was drafted to assist members and benefit recipients should a division of benefits become necessary. The form should not be construed as legal advice, and members and benefit recipients are encouraged to seek legal counsel with any domestic relations matter affecting their benefit.

Plaintiff
vs.    QUALIFIED DOMESTIC RELATIONS ORDER
Defendant
_____________/

This Order is intended to be a Qualified Domestic Relations Order ("QDRO") as it pertains to "Participant" and "Alternate Payee" under the provisions of the Public Employees' Retirement Act codified at Chapter 286 of the Nevada Revised Statutes (the "Act") and the policies enacted pursuant thereto, effective on or after October 1, 1993.

This Order creates or recognizes the existence of an Alternate Payee's right to, or assigns to an Alternate Payee the right to receive a portion of the benefits payable to a plan Participant. It also serves as authorization for the Public Employees' Retirement System (the "System") to provide specific information concerning the account to the Alternate Payee at any time.

This Order does not require the System to provide any type of or form of benefit, or any option, not otherwise provided under the Act and policies or require the System to provide increased benefits.

It is the intent of this Order to qualify as a Qualified Domestic Relations Order under the Act and policies and the provisions herein shall be administered and interpreted in conformity with the provisions of the Act and policies.

The following definitions apply to this order:

• PARTICIPANT. Participant is defined as the member of the Public Employees' Retirement System.
  
  
• __________________ is a Participant hereunder and his/her last known mailing address is ______________________________ and his/her date of birth is _______________ and his/her social security number is _______________.
  
  
• ALTERNATE PAYEE. Alternate Payee is defined as a spouse, former spouse, child or other dependent of a Participant who is recognized by this Order as having a right to receive a portion of the benefits payable under the Act with respect to such Participant.
  
  
• __________________ is the Alternate Payee of the Participant and his/her last known mailing address is _______________________ and his/her date of birth is _______________ and his/her social security number is _______________. The Alternate Payee is the [specify whether a spouse, former spouse, child, etc.] of the participant.
  
  
• DOMESTIC RELATIONS ORDER. Domestic Relations Order means any judgment, decree or order (including approval of a property settlement agreement) which relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child or other dependent, and is made pursuant to a State of Nevada domestic relations order (including community property law).

  This Order is entered pursuant to the laws of the State of Nevada.
  
  

• OTHER DEFINITIONS. Any other definitions necessary to effectuate this Order shall be adopted from the Act and the policies adopted pursuant thereto, as may from time to time be amended. These definitions shall include any and all definitions, terms or conditions required by statute to qualify this Order as a QDRO.
  
  
• PLAN. The name of the plan to which this Order applies is the Public Employees' Retirement System/Legislators Retirement System/Judicial Retirement System. The Plan is specifically directed to pay benefits pursuant to this Order.
  
  
• PLAN ADMINISTRATOR. The Plan Administrator is the Executive Officer, George Pyne, whose address is 693 West Nye Lane, Carson City, NV 89703.
  
  
• AMOUNT OF BENEFITS. The division of the Participant's and the Alternate Payee's portion of the benefit under the plan is as follows:

  The Alternate Payee is entitled to a portion of the Participant's retirement benefit based upon a mandatory selection of [please specify one option if applicable: the unmodified plan (option 1), or one of the options 2 through 6, as set forth in NRS 286.590] upon retirement in accordance with a set percentage of ______ [or the following distribution formula]:

  [The Public Employees' Retirement System will comply with any distribution formula arrived at by the parties provided the distribution formula or method does not result in a violation of the Act or policies nor does it contemplate a benefit in excess of what has been accumulated by the Participant according to the plan. The formula must be stated in clear terms, not subject to more than one interpretation. If the System cannot arrive at a clear determination of the benefit amount to be paid to the Alternate Payee, the order will be rejected for purposes of clarification. Additionally, the System will not pay a benefit to an Alternate Payee prior to the actual retirement of the Participant.]

  [If the order establishes payment to the Alternate Payee based on the period of marriage, the years of service credit earned during the marriage must be (1) calculated in the order or (2) the marriage date given].

  50% x	Years of Service Credit Earned
  	During Marriage Total Years of Service Credit Earned

  
  
  
• TIME PERIOD. The Alternate Payee shall be entitled to the benefit as calculated above for [period of years beginning with date of Participant's retirement, or as long as Participant is receiving benefits or for some other period chosen by the parties so long as clearly stated and in compliance with the Act]. The Alternate Payee is entitled to payment under the above described formula (or flat dollar amount less than the full benefit) as applied to option __________________ (unmodified benefit or one of the six enumerated options set forth at NRS 286.590) [Note: Lacking this information, the System will assume that the Participant has sole discretion in the choice of a retirement plan and/or whether to retire or take a refund of contributions made if available. Monies payable to an Alternate Payee will be paid in accordance with the benefit plan elected by the Participant].
  
  
• RETENTION OF JURISDICTION. The Court shall retain jurisdiction to amend this Order for the purpose of establishing or maintaining its qualifications as a QDRO, or for purposes of subsequent amendment as required. Neither this Order nor any amendment shall require the System to provide any type or form of benefit, or, any option not otherwise provided for under the Act. It is further provided that any amendment of this Order or the right of the Court to so amend will not invalidate this Order as "qualified" under the Act.
  
  
• ADMINISTRATOR. A certified copy of the Order shall be served upon the Plan Administrator.

  Said Order is subject to review by the Administrator and if approved by the Administrator is effective on the date set forth herein. If this Order is determined by the Administrator to be a QDRO then the Plan Administrator shall, within a reasonable period of time after delivery of this Order, notify the Participant and the Alternate Payee of such determination. If the Administrator determines that the Order does not qualify as a QDRO the Administrator shall, within a reasonable period of time, notify the Participant and the Alternate Payee of the reasons for such determination and shall, if the Participant is to retire within 90 days of the Order maintain the benefit under Option 2 as set forth in NRS 286.545, for a period of 90 days from the date of the Participant's retirement to allow modification of this Order for qualification.

  This Order is intended to be merged to the decree of divorce in this matter, and is subject to all provisions of that Decree except in cases where this QDRO and the Decree contradict, in which case the QDRO shall control.
  
  

• OPTIONAL PROVISIONS. If the participant dies before the alternate payee begins receiving benefits in accordance with the plan selected and a distribution of contributions is available from the account of the participant, the alternate payee shall receive _____% of the distributed refund.

  (Note: this provision does not entitle the alternate payee to receive a portion of payable survivor benefits, as those benefits are only payable to a current spouse or dependent children of the participant, or the designated beneficiary listed on the PERS Unmarried Members of the System Form).

The following checklist is to assist you and your attorney in preparing a document that complies with Chapter 286 of the Nevada Revised Statutes.

Does the Order, Judgment or Decree follow the guidelines and contain the following required information? The responses in this section must be "yes" for qualification of the QDRO.

Does it specifically direct PERS to pay an allowance or benefit to the Alternate Payee?
Yes
	Does it relate to child support, spousal support or marital property rights?
	Is it properly issued by a court of law for the State of Nevada and signed by a district judge or by the justices of the supreme court and entered and certified by the clerk of the district court or clerk of the supreme court?
	Does it create or recognize the existence of the eligible alternate payee's right and assign to the alternate payee the right to receive all or part of the member's benefits under a plan when the member's retirement benefits commence?
	Does it contain language which authorizes the system to provide specific information to the alternate payee from the retirement file of the member? (In lieu of this provision, the member may file a waiver which allows the ex-spouse to review the member's file. The waiver must be submitted with the QDRO.)
	Does it specify clearly the name, last known address and Social Security number of the alternate payee?
	Does it state the retirement plan (the Unmodified plan or one of six alternate plans enumerated in NRS 286.590) to which the order applies? Note: Lacking this information, PERS will assume that the member has sole discretion in the choice of a retirement plan and/or whether to retire or take a refund. Monies payable to an Alternate Payee will be paid in accordance with the benefit plan elected by the member.
	Does it specify clearly the amount, percentage or manner of determining the amount of the allowance or benefit of the member or retired employee that must be paid by the system to each Alternate Payee?
	Example: Alternate Payee's Share = 50% x (Years of service credit earned during marriage divided by total years of credited service earned)
	If the order establishes payment to the alternate payee based on the period of marriage, the years of service credit earned during the marriage must be either (1) calculated in the order or (2) the marriage date given.
	Does it specify the number of payments or the period to which the order applies?
Is this optional provision included in the Order?
	Does it contain language which provides that if a member dies before the alternate payee begins receiving benefits and a refund of the contribution account is payable, the alternate payee will be eligible to receive the specified share of the refund? NOTE: If the member dies before retirement, a refund would only be applicable if the member has no other eligible survivors under NRS 286.671 through 286.6791, inclusive.
Does the order contain language which is not compatible with the Nevada Revised Statutes, Chapter 286? The responses in this section must be "no" for qualification of the QDRO.
No
	Does it contain language which requires payment to an alternate payee either in the form of a lump-sum payment, or as an allowance or benefit before the member terminates employment and is eligible for a refund of employee contributions or a retirement benefit? No lump-sum option is available if the member has chosen to receive benefits in any other form allowed under the plan.
	Does it require the payment of any type, form, option or amount of benefit other than that allowed under Chapter 286 of the Nevada Revised Statutes?

NOTE: Receipt by PERS of an order which for any reason does not comply with NRS Chapter 286 will serve as temporary notice to PERS of a forthcoming order regarding distribution of a member's benefits and any attempts to obtain a refund of contributions or retirement allowance from such Member's account will not be allowed for a period of 90 days

In Las Vegas: Weekdays at the office building located at 5820 South Eastern Ave., Suite 220, from 8:00 a.m. to 5:00 p.m. If possible please call 1-702-486-3900 for an appointment.

Office for rural Nevada: Counselors are available during the Spring and Fall. Please watch for our notices and call our Carson City office for an appointment.

For telephone inquiries, call:

• from Las Vegas: (702) 486-3900
  
  
• from Carson City or Reno: (775) 687-4200
  
  
• from anywhere else in Nevada:
  1-866-473-7768(toll free)
  

Website: www.nvpers.org