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HomeMy WebLinkAbout23 EDRO Payment Policy TAB 23 EDRO PAYMENT POLICY November 17 , 2013 CITY OF LANSING POLICE AND FIRE RETIREMENT SYSTEM BOARD OF TRUSTEES EDRO PAYMENT AND CALCULATION POLICY I. Purpose. The Lansing Police and Fire Retirement System Board of Trustees(the"Board")establishes the following Policy to provide a process for Eligible Domestic Relations Order ("EDRO") certification and fee calculation. Il. Policy. A. Before the Board can honor an EDRO,the Board,through the assistance of its actuary, attorney and/or other agent,must first ascertain that the order meets all the requirements of 1991 PA 46, as amended. B. EDRO certification and calculation services shall be performed by the Board's actuary. Fees for such services shall be set by contract between the Board and its actuary. C. The funding assumptions of the Lansing Police and Fire Retirement System, as may be amended from time to time by the Board, shall be used for purposes of the actuarial equivalence in all EDRO calculations. Policy adopted:November 17,2013 9719705.2 26005/118235 Regular Meeting November 21, 2006 Council Conference Room Tuesday, 8:30 a.m. 10th Floor, City Hall Lansing, MI Page Three }� Jack Roberts reviewed the process for Eligible Domestic Relations Order (EDRO). Mr. Roberts asked that policy be approved by the Board regarding EDRO certification and calculation fees. It was moved by Trustee Kraus and supported by Trustee Hol liday to approve the following policy: Before the Retirement Plan can honor the domestic relations order, it must first ascertain that the order is an eligible domestic relations order meeting all the requirements of Act 46, Public Acts of 1991. The City of Lansing has established a procedure for both the review and certification of the EDRO and the calculation of the Alternate PayeeGs assigned portion of a pension under an EDRO. Both the actual certification and calculation services are performed by the retirement systemas actuary, Gabriel, Roeder, Smith and Company (GRS). GRSOs fees for performance of these services are the responsibility of the plan participant and his or her spouse with payment due in advance of submission to the actuary, The current fees are: $600.00 certification $850.00 calculation Adopted by the following vote: unanimously STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF Plaintiff Case No. VS. HON. Defendant l P_ Attorney for Plaintiff (Address) (Phone##) P Attorney for Defendant (Address) {Phone#} 1 {THE CITY OF LANSING POLICEMEN AND FIREMEN RETIREMENT SYSTEM EDRO—MODEL A} ELIGIBLE DOMESTIC RELATIONS ORDER FOR The City of Lansing Policemen and Firemen Retirement System At a session of said Court, held in the Courthouse, in the City of , County of _ , State of Michigan, on the ___day of A.D. PRESENT: HON. Circuit Court Judge This Order is intended to serve as an Eligible Domestic Relations Order (".EDRO") by which [Plaintiff/Defendant], assigns a portion of [his/her] retirement benefits, under the retirement plan specified below, to the [Plaintiff/Defendant], in accordance with the Eligible Domestic Relations Order Act (Public Act 46 of 1991 — MCL 38.1701-38.1711) and the City of Lansing Policemen and Firemen Retirement System document. [It is intended that this Order be incorporated in the Judgment of Divorce entered _ and made a part thereof.] 8/00 '1_ 1. The Retirement System (the "Plan") subject to this Order is as follows: The City of Lansing Policemen and Firemen Retirement System 124 West Michigan Avenue, 8`h Floor Lansing, Michigan 48933 (517) 483-4509 (Note: 1991 PA 46 requires that the Order must be Filed before the participant's retirement benefit effective date in order to qualify as an EDRO.) 2. The Participant is the [Plaintiff/Defendant], Social Security No. Date of Birth ; whose last known address is: 3. The Alternate Payee is the [Plaintiff/Defendant], Social Security No. Date of Birth whose last •known address is: 4. The Participant and the Alternate Payee were married on 19___, and were [divorced/separated] on. , 5. The Participant assigns to the Alternate Payee a portion of[his/her]benefits from the Plan, and the Plan will pay benefits to the Alternate Payee according to the following terms and conditions: (a) It is the parties' intention and the order of this Court, that the Alternate Payee receive a monthly benefit from the Plan of % of the amount of the Participant's retirement benefit which has accrued as of (the allocation date), which Alt. 1 percentage takes into consideration the years of service, if any, that were accrued prior to the date of marriage. OR: Alt. 2 I from the date of marriage through the date of divorce, (the allocation date). The. Alternate Payee's benefit shall include a prorata share of any guaranteed automatic annual benefit increases that were part of the Participant's accrued benefit as of the allocation date. If the 8%00 `2- Participant acquires no right to a pension from the Plan, duc to termination of covered employment before vesting occurs or death of the Participant before retirement and before the eligibility conditions for a pre-retirement survivor benefit have been satisfied or for any other reason, the Alternate Payee's rights shall be limited to the stated percentage of non-pension payment, if any, that the Plan makes to, or on behalf of, the Participant that had accrued as of the allocation date. (b) Payments to the Alternate Payee shall commence Alt. 1 I when the Participant begins to receive benefits under the Plan. OR: as selected by the Alternate Payee at any time not later than the date Alt. 2 the Participant begins to receive benefits, but not before the Participant reaches the earliest retirement date as defined in Section 2(d) of the Eligible Domestic Relations Order Act (Public Act 46 of 1991). As required by the Act, Plan payments will not begin before the first day of the month following notification by the Alternate Payee of[his/her] election to begin payments. If the Alternate Payee elects to begin payments before the Participant retires, the payments otherwise due the Alternate Payee shall be adjusted as required by Section 5 (2) of Public Act 46 of 1991. As required by the Act, Plan payments will not begin before the first day of the month following the determination by the Plan Administrator that this Order is an EDRO. (c) Payments to the Alternate Payee for that portion of the retirement benefit which is being divided in Paragraph 5(a) will be made Alt. 1 I during the life of the Alternate Payee and shall end upon the death of the Alternate Payee. OR: under the Plan's Option B 50% .Joint and Survivor pension. The Participant shall designate the Alternate Payee as beneficiary of the Alt. 2 joint and survivor pension. While both parties are alive, the Plan shall pay the Alternate Payee an amount equal to the percentage (Include specified in Paragraph 5(a) multiplied by the reduced joint and only if Alt. I survivor pension and the same amount shall be subtracted from the is chosen in benefits otherwise payable to the Participant. After the Participant's (b) above) death, if the Alternate Payee is alive, the Plan shall pay the Alternate Payee 50% of the reduced joint and survivor pension that is being allocated in this paragraph. After the Alternate Payee's death, if the Participant is alive, the entire reduced joint and survivor pension shall be paid to the Participant. (d) If the provisions of Paragraph 5(c) above would require the Plan to provide benefits which differ in value from the benefits the Plan 8/00 -3- would have paid had the divorce not occurred, determined on the basis of actuarial equivalent values, due to differences in life expectancies of the Participant and the Alternate Payee, the difference in values shall be eliminated through adjustment to the benefits otherwise payable to the Alternate Payee. (e) if after the date this Order is determined by the Plan Administrator Optional to be an EDRO the Plan pays any post-retirement benefit increase other than the guaranteed, automatic, annual increases described in Paragraph 5(a) (i.e., non-guaranteed annual increases, supplemental payments, 13th checks, one-time increases) for which the Participant is eligible, or is ineligible solely due to the Participant's death, such special payment shall be allocated between the Participant's benefit and the Alternate Payee's benefit. Each share will be in proportion to the amount of retirement benefits. (f) If the Alternate Payee predeceases the Participant prior to the commencement of benefits to the Alternate Payee under this Order, the Alternate Payee's interest in the Plan shall revert back to the Participant. Optional (g) The Participant shall designate the Alternate Payee as the surviving spouse for purposes of the Plan's pre-retirement survivor benefit for the percentage in Paragraph 5(a) of the accrued retirement benefit being allocated in Paragraph 5(a). If the Participant dies before payments to the Participant have begun and before payments to the Alternate Payee have begun, the Plan shall pay the Alternate Payee a benefit based upon the Plan's pre-retirement survivor benefit for the percentage in Paragraph 5(a) of the accrued retirement benefit being divided in Paragraph 5(a). No payments shall be made under this paragraph if the Participant dies after payments to the Alternate Payee have begun, or before the Participant has qualified for the pre-retirement survivor benefit. (h) The Alternate Payee shall include in [his/her] gross income, for the tax year of receipt, all retirement benefit distributions that [he/she] receives pursuant to the Participant's assignment of benefits under this EDRO; and, accordingly, the Participant shall not include such benefit distributions in [his/her] gross income. The Alternate Payee shall be treated as the sole distributee under IRC Sections 72 and 402 of any payment or distribution that is made to [him/her] under the Participant's assigiunent of benefits under this EDRO. (i) if the pension has been funded in part by after-tax contributions by the Participant, the after tax contributions as of the allocation date in Paragraph 5(a) shall be deemed to be financing the pensions of both the Participant and the Alternate Payee and shall be attributed to each using the percentage in.Paragraph 5(a). 8/00 (j) The Participant and the Alternate Payee agree to share any fees or expenses incurred by the Plan due to this Order or the benefit election by the Alternate Payee under this Order, each being responsible for 50% of these costs, and each party shall, upon request, perform any act and complete any form reasonably necessary to carry into effect the terms of this Order. 6. This assignment of benefits shall not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan. This assignment shall not require the Plan to provide increased benefits, determined on the basis of actuarial equivalent values. This assignment shall not require the Plan to provide benefits to the Alternate Payee which are required to be paid to another alternate payee under another order previously determined to be an EDRO, or as otherwise provided by Section I 1 of the Eligible Domestic Relations Order Act (Public Act 46 of 1991). 7. In the event the administrator of the Plan determines this Order not to be an EDRO satisfactory to the Plan, the Participant and Alternate Payee hereby agree to submit to and request a court of competent jurisdiction to modify the Order to make it an EDRO satisfactory to the Plan in such a manner that will reflect the parties' intent as herein expressed and thereafter to enter an order modifying this Order, said modified order to be entered nunc pro tune, if appropriate, so as to comply with Public Act 46 of 1991, the Plan and related legislation. Circuit Court Judge Approved as to form [and content]: P Date Attorney for Plaintiff P Date Attorney for Defendant Distribution of copies: -- Original to Circuit Court Clerk -- Certified copy to Plan Administrator (at address given in Paragraph 1) 8l00 5 STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF Plaintiff Case No. vs. HON. Defendant T _ P Attorney for Plaintiff {Address} {Phone#) P Attorney for Defendant (Address) {Phone#} a {THE CITY OF LANSING POLICEMEN AND FIREMEN RETIREMENT SYSTEM EDRO—MODEL B) ELIGIBLE DOMESTIC RELATIONS ORDER FOR The City of Lansing Policemen and Firemen Retirement System At a session of said Court, held in the Courthouse, in the City of , County of , State of Michigan, on the day of, A.D. PRESENT: HON,. Circuit Court Judge This Order is intended to serve as an Eligible Domestic Relations Order ("EDRO") by which [Plaintiff%Defendant], assigns a portion of [his/her] retirement benefits, under the retirement plan specified below, to the [Plaintiff/Defendant], in accordance with the Eligible Domestic Relations Order Act (Public Act 46 of 1991 -- MCL 38.1701-38.1711) and the City of Lansing Policemen and Firemen Retirement System document. [It is intended that this Order be incorporated in the Judgment of Divorce entered _, , and made a part thereof.] 8/00 4- 1. The Retirement System. (the"Plan") subject to this Order is as follows: The City of Lansing Policemen and Firemen Retirement System 124 West Michigan Avenue, 8"' Floor Lansing, Michigan 48933 (517) 483-4509 {Note: 1991 PA 46 requires that the Order, to be considered, must be filed before the participant's retirement benefit date.} 2. The Participant is the [Plaintiff/Defendant], , Social Security No. Date of Birth ; whose last known address is: 3. The Alternate Payee is the [Plaintiff/Defendant], , Social Security No. Date of Birth whose last known address is: 4. The Participant and the Alternate Payee were married on , 19___, and were [divorced/separated] on , 5, The Participant assigns to the Alternate Payee a portion of[his/her] benefits from the Plan and the Plan will pay benefits to the Alternate Payee according to the following terms and conditions: (a) It is the parties' intention and the order of this Court, that the Alternate Payee receive a monthly benefit from the Plan of$ The Alternate Payee's benefit shall include a prorata share of any guaranteed automatic annual benefit increases that were part of the Participant's accrued benefit as of _ (the allocation date). If the Participant acquires no right to a pension from the Plan, due to termination of covered employment before vesting occurs or death of the Participant before retirement and before eligibility conditions for a pre-retirement survivor benefit have been satisfied or for any other reason, the Alternate Payee's rights shall be limited to_% of non-pension payments,if any, that the Plan makes to, or on behalf of, the Participant that had accrued as of the allocation date. g/UO "Z (b) Payments to the Alternate Payee shall commence on this date being on or after the date the Participant reaches the earliest retirement date as defined in Section 2(d) of the Eligible Domestic Relations Order Act (Public Act 46 of 1991). As required by the Act, Plan payments will not begin before the first day of the month following the determination by the Plan Administrator that this Order is an EDRO, (c) Payments to the Alternate Payee in the amount specified in Paragraph 5(a) will be made during the life of the Alternate Payee and shall end upon the death of the Alternate Payee. (d) If the provisions of Paragraphs 5(b) and 5(c) above would require the Plan to provide benefits which differ in value from the benefits the Plan would have paid had the divorce not occurred, determined on the basis of actuarial equivalent values, the difference in values shall be eliminated through adjustment to the benefits otherwise payable to the Participant. Optional (e) If after the date this Order is determined by the Plan Administrator to be an EDRO the Plan pays any post-retirement benefit increase other than the guaranteed, automatic, annual increases described in Paragraph 5(a) (i.e., non-guaranteed annual increases, supplemental payments, 13th checks, one-time increases) for which the Participant is eligible, or is ineligible solely due to the Participant's death, such special payment shall be allocated between the Participant's benefit and the Alternate Payee's benefit. Each share will be in proportion to the amount of retirement benefits. (f) If the Alternate Payee predeceases the Participant prior to the commencement of benefits to the Alternate Payee under this Order, the Alternate Payee's interest in the Plan shall revert back to the Participant. Optional (g) The Participant shall designate the Alternate Payee as the surviving spouse for purposes of the Plan's pre-retirement survivor benefit for the portion of the retirement benefit which is allocated to the Alternate Payee in Paragraph 5(a). If the Participant dies before payments to the Participant have begun and before payments to the Alternate Payee have begun, the Plan shall pay the Alternate Payee a benefit based upon the Plan's pre-retirement survivor benefit for the portion of the retirement benefit which is allocated to the Alternate Payee in Paragraph 5(a). No payments shall be made under this paragraph if the Participant dies after payments to the Alternate Payee have begun, or before the Participant has qualified for the pre-rctirement survivor benefit. (h) The Alternate Payee shall include in [his/her] gross income, for the tax year of receipt, all retirement benefit distributions that [he/she] receives pursuant to the Participant's assignment of benefits under 8/00 . - this EDRO; and, accordingly, the Participant shall not include such benefit distributions in [his/her] gross income. The Alternate Payee shall be treated as the sole distributee Linder IRC Sections 72 and 402 of any payment or distribution that is made to [him/hcr] under the Participant's assignment of benefits under this EDRO. (i) If the pension has been funded in part by after tax contributions by the Participant, the after tax contributions as of the allocation date in Paragraph 5(a) shall be deemed to be financing the pensions of both the Participant and the Alternate Payee and shall be attributed to each in the proportion to the accrued pension allocation in Paragraph 5(a). (j) The Participant and the Alternate Payee agree to share any fees or expenses incurred by the Plan due to this Order or the benefit election by the Alternate Payee under this Order, each being responsible for 50% of these costs, and each party shall, upon request, perform any act and complete any form reasonably necessary to carry into effect the ternis of this Order. 6. This assignment of benefits shall not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan. This assignment shall not require the Plan to provide increased benefits, determined on the basis of actuarial equivalent values. This assignment shall not require the Plan to provide benefits to the Alternate Payee which are required to be paid to another alternate payee under another order previously determined to be an EDRO, or as otherwise provided by Section 11 of the Eligible Domestic Relations Order Act (Public Act 46 of 1991). 7. In the event the administrator of the Plan determines this Order not to be an EDRO satisfactory to the Plan, the Participant and Alternate Payee hereby agree to submit to and request a court of competent jurisdiction to modify the Order to make it an EDRO satisfactory to the Plan in such a manner that will reflect the parties' intent as herein expressed and thereafter to enter an order modifying this Order, said modified order to be entered nunc pro tune, if appropriate, so as to comply with Public Act 46 of 1991, the Plan and related legislation. Circuit Court Judge Approved as to form [and content]: P Date Attorney for Plaintiff P Date Attorney for Defendant Distribution of copies: -- Original to Circuit Court Clerk -- Certified copy to Plan Administrator(at address given in Paragraph 1) s/oo -4