Summary
holding that an order withholding pay from a former spouse's monthly pension disbursement to satisfy an alimony arrearage qualified as a QDRO under ERISA
Summary of this case from In re Marriage of ThomasOpinion
No. 88-819
Submitted April 11, 1989 —
Decided July 5, 1989.
Domestic relations — Pensions — ERISA — R.C. 3113.21(D)(4) authorizes issuance of "qualified domestic relations order."
O.Jur 3d Family Law §§ 638, 994.
R.C. 3113.21(D)(4) authorizes a domestic relations court to issue a "qualified domestic relations order" attaching benefits provided under pension plans qualifying under the Employee Retirement Income Security Act, Section 1001 et seq., Title 29, U.S. Code.
APPEAL from the Court of Appeals for Franklin County, No. 87AP-522.
Louise A. Taylor, appellant, and Charles H. Taylor, appellee, were divorced on January 24, 1980. Mrs. Taylor was awarded permanent alimony of $350 per month until she remarried or died or until further order of the court. She also retained the total equity in the marital real estate located in Reynoldsburg, Ohio, title to the 1972 Cutlass automobile, and her personal property and savings account. Mr. Taylor was awarded his retirement account with Columbia Gas System, Inc. ("Columbia Gas"), his savings and thrift plan accounts, and sundry personal property. Mr. Taylor's motion for reduction of alimony was overruled, as was his later motion to terminate alimony.
As of July 1985, the appellee was receiving pension benefits of $1,210.72 per month from Columbia Gas. (This amount was reduced to $790.72 per month beginning February 1, 1987.) Nevertheless, he ceased making the required alimony payments in December 1982. As a result of this failure, by December 31, 1986, he was in arrears by $16,450. Mrs. Taylor moved to have Mr. Taylor held in contempt. In addition, she filed a motion in which she requested that alimony and arrearages be withheld from the aforementioned monthly pension benefits.
The trial court rendered its decision on May 4, 1987 in favor of Mrs. Taylor and issued a withholding order to Columbia Gas for $350 per month continuing alimony, plus $250 per month on the arrearage with such additional amount to be terminated upon the arrearage being paid in full. Mr. Taylor appealed the decision to the Franklin County Court of Appeals.
Counsel for Columbia Gas responded to the clerk of the common pleas court by letter on June 8, 1987, indicating that it could not comply with the court's order. Columbia Gas maintained that unless a qualified domestic relations order ("QDRO") is issued, an assignment or alienation of benefits under its Retirement Income Plan is prohibited by the Employee Retirement Income Security Act of 1974 ("ERISA"), Section 1001 et seq., Title 29, U.S. Code. The letter also stated that since Mr. Taylor was in the process of appealing the trial court's decision, any withholdings from Mr. Taylor's pension checks should be deferred until the court of appeals rendered a decision.
On appeal, Mr. Taylor argued that the withholding order is not a QDRO because it is not made pursuant to state domestic relations law. On March 8, 1988, the Franklin County Court of Appeals agreed and vacated the order, holding that R.C. 3113.21(D)(3) permits withholding from governmental pension benefits only and not from private plans qualifying under ERISA.
This cause is now before the court pursuant to the allowance of a motion to certify the record.
Duane F. Lantz, for appellant.
Windell F. Fisher and Judith R. Maxwell, for appellee.
The issue here concerns whether the attachment order issued by the trial court in this case is a "qualified domestic relations order" as defined in ERISA Section 1056(d)(3)(B). We hold that R.C. 3113.21(D)(4) (now renumbered [4][a]) authorizes a domestic relations court to issue a "qualified domestic relations order" ("QDRO") attaching pension plans qualifying under ERISA.
Private pension plans qualifying under ERISA are subject to numerous restrictions, the most significant of which is that the benefits provided in such plans may not be assigned or alienated. ERISA Section 1056(d)(1). Following the enactment of ERISA a question arose as to whether, in divorce actions, courts could assign ERISA pension benefits to nonparticipant spouses notwithstanding the anti-alienation provision and Section 1144(a), which establishes ERISA's preemption of state law. See, e.g., American Tel. Tel. Co. v. Merry (C.A.2, 1979), 592 F.2d 118. In the Retirement Equity Act of 1984, Congress responded by creating a limited exception to the anti-alienation provision for court orders which meet the requirements of a QDRO. See ERISA Section 1056(d)(3).
There are several requirements of a QDRO, the first of which is that the order must be a "domestic relations order." This is the requirement at issue in this case. ERISA Section 1056(d)(3)(B)(ii) defines "domestic relations order" as "* * * any judgment, decree, or order (including approval of a property settlement agreement) which —
"(I) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and
"(II) is made pursuant to State domestic relations law (including a community property law)."
There is no dispute over the fact that the court's order relates to "alimony payments" as required in ERISA Section 1056(d)(3)(B)(ii)(I). The court of appeals below, however, held that the order was not made pursuant to a state domestic relations law and thus did not satisfy ERISA Section 1056(d)(3)(B)(ii)(II). In reading R.C. 3113.21(D)(3), the court noted that the statute describes only the withholding of ordered alimony payments from numerous governmental pension plans.
R.C. 3113.21(D)(3) (now renumbered [3][a]) provides:
"If the court * * * determines that the obligor is receiving any pension, annuity, allowance, or other benefit or is to receive or has received a warrant refunding his individual account from the public employees retirement system [or other specified governmental retirement fund], * * * the court may issue an order requiring the public employees retirement board [or other appropriate controlling entity] * * * to withhold from the obligor's pension, annuity, allowance, other benefit, or warrant a specified amount for support in satisfaction of the support order, to begin the withholding one week after receipt of the order, and to continue the withholding at intervals determined by the court in its order until further order of the court. * * *"
R.C. 3113.21, however, is not limited to the withholding of pension benefits for the payment of alimony and support from governmental pension plans alone. R.C. 3113.21(D)(4) (now renumbered [4][a]) provides:
"If the court * * * determines that the obligor is receiving any form of income, including, but not limited to, disability or sick pay, insurance proceeds, lottery prize awards, [etc.], * * * the court may issue an order requiring the person who pays or otherwise distributes the income to the obligor to withhold from the obligor's income a specified amount for support in satisfaction of the support order, to begin the withholding one week after receipt of the order, and to continue the withholding at intervals determined by the court in its order until further order of the court. * * *" (Emphasis added.)
Under the court of appeals' ruling in this case, no QDRO could issue until the General Assembly has enacted a statute which specifically authorizes the withholding of benefits from ERISA-governed pension plans. The legislative history of ERISA Section 1056(d)(3) gives no indication that the "State domestic relations law" requirement of Section 1056(d)(3)(B)(ii)(II) was to be so strictly construed. See 1984 U.S. Code Cong. Admin. News 2564-2569. Indeed, since the enactment of Section 1056(d)(3) in 1984 there appears to have been only one case holding that an order attaching ERISA pension benefits is not a QDRO because it was not made pursuant to state domestic relations law. Stinner v. Stinner (1987), 362 Pa. Super. 219, 226, 523 A.2d 1161, 1164 (holding that because the order therein was based on a property settlement it was rendered "pursuant to general rules pertaining to the enforcement of contracts and not by virtue of any domestic relations law"). R.C. 3113.21(D)(4) authorizes the withholding of "any form of income, including, but not limited to" the items listed therein. Appellee's pension benefits, like all benefits provided under ERISA-governed pension plans, are clearly a "form of income" within the language of this statute. Thus, we conclude that R.C. 3113.21(D)(4) authorizes the trial court to issue an order withholding benefits from an ERISA-governed pension plan, i.e., to issue a QDRO. The court of appeals decision is reversed and the case is remanded for enforcement of the order if it meets the other requirements of a QDRO.
In addition to the formal requirements of a QDRO, such an order must not: (1) require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan, (2) require the plan to provide increased benefits, or (3) require payment of benefits to an alternate payee that are required to be paid to another alternate payee under a previously existing QDRO. ERISA Section 1056(d)(3)(D). Whether the attachment order complies with these other requirements has not been passed on by the court below, and thus we express no opinion in this regard.
Judgment reversed and cause remanded.
MOYER, C.J., SWEENEY, HOLMES, DOUGLAS, H. BROWN and RESNICK, JJ., concur.