How are my retirement benefits an issue in my divorce?
Your pension from the Holyoke Retirement System is generally considered a marital asset and, whether you are currently receiving a retirement allowance or are still actively in service, it may be subject to valuation and division in a divorce.
What is a domestic relations order?
A domestic relations order—commonly known as a DRO—is a judgment, decree or order (including approval of a property settlement agreement) that sets out how a person’s retirement benefits are to be allocated between parties who are in the process of divorcing or who are already divorced. The DRO must be reviewed and accepted by the Retirement Board to ensure that it complies with the General Laws and is enforceable.
The process of having a DRO accepted by the MTRS involves the following steps:
1) The parties submit the DRO to the Board.
2) The Board’s attorney reviews the DRO to be sure that it complies with the Massachusetts General Laws chapter 32) and can be implemented. If the DRO is not acceptable, the Board will notify, in writing ,the attorney submitting the DRO that revisions need to be made. If the DRO is acceptable and has been signed by the court, a standard letter is prepared accepting it as a qualified Domestic Relations Order.
3) The order is filed in the member’s file and noted on our computer system. We strongly recommend that both parties keep a copy of the order for their own files.
DROs deal primarily with retirement benefits. Because a pension is an asset that becomes payable at some future date, and involves many “unknowns,” it is necessary to address how it will be divided in a very specific document. This document usually gives to an alternate payee the right to receive part of the benefits that would be payable to a participant under the plan. The DRO may not alter the amount or form of the benefits of the plan.
See below for a sample Domestic Relations Order and a description of actions that the court cannot order the Board to take.
As a member of the Holyoke Retirement System who is now receiving or will be entitled to receive a retirement allowance, do I need to have a Domestic Relations Order as part of my divorce?
Not necessarily. Depending on your particular financial situation, you may be able to address the division of your retirement allowance in another way, such as calculating the present value of your benefits and then apportioning it along with your other assets. However, this is an issue for you to discuss with your attorney.
Can the Retirement Board determine the present value of my future retirement benefits?
No. We can only give information regarding current account balances. For the computation of the present value of the member’s benefits, you will need to consult an actuary or other financial professional. The information that an actuary will need to assign value to your retirement allowance can be provided.
Can a court order the Holyoke Retirement Board to divide current or future benefits by issuing separate checks, part to the member and part to an alternate payee?
Yes. Pursuant to M.G.L. c. 32, §19, payments from the Holyoke Retirement Board may be made to another person (known as an alternate payee) who is expressly provided for in the terms of any Domestic Relations Order or court decree.
May benefit rights be assigned or attached to satisfy a support obligation?
In certain cases, yes. The rights of members are normally exempt from execution, garnishment or other processes unless a support order has been issued under M.G.L. cc. 208, 209,209A, 209C, 209D or 273. Benefit rights may be assigned or attached in connection with child support orders or alimony.
Are the payments made by the Holyoke Retirement Board subject to either the Retirement Equity Act or the Employment Retirement Income Security Act (ERISA)?
No. Public and government plans are specifically exempt from the provisions of both those federal acts.
Can anyone other than the member require the Holyoke Retirement Board to disclose information contained in that member’s file, such as a beneficiary designation or the account balance?
Under the general public records law, we may not disclose to other parties the information in a member’s file unless:
- we have a release, signed by the member, on file (we will need a release from you in order to share information with your attorney); or,
- the information has been subpoenæd, we have notified the member of the request and given him or her the opportunity to quash the subpoena, and the subpoena has not been quashed.
Can a representative of the Retirement Board be called upon to testify in court?
Yes—however, most—if not all—of the information you need to compose a Domestic Relations Order can be communicated by written documentation, which we will gladly provide.
I am a retiree who is getting divorced. In what way can a Domestic Relations Order affect my retirement allowance?
Your retirement allowance may be apportioned, but neither the total amount nor the option you selected at the time of your retirement may be changed. If applicable, we will divide your monthly allowance according to the terms of the Court’s order or the parties’ agreement.
From the Retirement Board’s perspective, what issues do I need to address in structuring a Domestic Relations Order?
If we are currently paying you a retirement allowance, you need to be sure to address the percentage or amount of your retirement allowance that is to be made payable to the alternate payee. Please also refer to the following: