Employees Retirement System of Texas

FAQ Item

Question:

When is a QDRO appropriate?

Answer:

Changes in the family relationship are the only circumstances in which a court can order a redirection of ERS retirement benefits. In other words, the law only allows the ERS to pay retirement benefits to a person other than an ERS member or the member's designated beneficiary in the case of divorce or child support, and never in any other circumstances.

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Question:

Why does ERS require its own QDRO language?

Answer:

The special language that has to be in an ERS QDRO model is described in state law in Chapter 804 of the Texas Government Code. The ERS QDRO has to have special language that is not found in other versions of QDROs for other retirement plans. Unlike private employers, ERS is expressly exempt from certain federal QDRO laws like the Employees Retirement Income Security Act (ERISA) or Section 414 of the IRS Code. Therefore, a QDRO that makes references to these laws will not be acceptable to the ERS. Separate QDROs will be required by other retirement systems.

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Question:

My ex-spouse is still working, but my attorney said that I would get my share of the retirement contributions right now. Why haven't I gotten my money yet?

Answer:

A state employee is not allowed to "cash out" retirement contributions and continue to work for the state. Because a state employee can't "cash out" retirement contributions, neither can an alternate payee, as a matter of law.

Therefore, the law strictly forbids any sort of immediate distribution of retirement contributions to the alternate payee. If the ERS member quits working for the state and then asks for a refund of contributions, the alternate payee would get a share of those contributions, but the law does not allow an alternate payee to dictate whether an ERS member withdraws contributions or not.

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Question:

My ex-spouse is an ERS member, and is currently working. I have written in my will that my children get my share of my ex-spouse's retirement benefits if I die. How do I make sure my children get this money?

Answer:

If you ever receive any retirement benefit through a QDRO as an alternate payee, that benefit will end upon your death. You cannot pass this benefit on to your children because the payments will not continue after you die, as a matter of law. In fact, if you die before your ex-spouse retires, you will receive nothing. This is a matter of statutory law that has withstood court challenge, and is different from the federal law that applies to private employers.

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Question:

What type of plan is ERS? How does that affect the QDRO?

Answer:

The ERS retirement plan is a defined benefit plan. In other words, the amount of money that a member puts into the system bears no direct relationship to the amount of retirement benefits that the person will receive. Do not use ERS retirement account levels or contributions as a gauge for property settlement in divorce unless you expect that the ERS member will withdraw contributions. The ERS member cannot be ordered or forced by the QDRO into withdrawing ERS contributions. Settlement calculations should be based on the actuarial value of the retirement annuity payable to the member, if any. NOTE: ERS will not provide any actuarial valuations.

Also, because the ERS plan is a defined benefit plan, it is inappropriate and misleading to use member payroll contribution levels to calculate the community property share of the retirement interest. Instead, always use the ratio of service credit (in months, not days) accumulated during marriage divided by the total service credit (in months) accumulated up to divorce to calculate the community property interest.

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Question:

Can I get legal advice about my divorce from the ERS?

Answer:

No. ERS is not your attorney and cannot advise you as to what you should do in your divorce. Any questions outside the scope of QDRO approval should be directed to your attorney.

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Question:

I have a State Bar Family Law Practice Manual that includes a preprinted QDRO form. When I sent it in to the ERS, I discovered that you will not accept this form without changes. Isn't the State Bar Form valid?

Answer:

The editorial staff of the State Bar Family Law Practice Manual publishes a QDRO form for state governmental plans. However, this form includes wording that is not specifically coordinated with ERS requirements, and its use risks our rejection if submitted without necessary changes. Therefore, we recommend that you use the ERS QDRO model. This assured you are using the language that ERS considers the most up-to-date and acceptable.