217 A.3d 289
Pa. Super. Ct.2019Background
- Husband (JetBlue plan participant) and Wife are married and not seeking divorce; they jointly petitioned the Lehigh County court for a QDRO to transfer Plan funds to an IRA in Wife’s name.
- June 2018: parties filed a verified joint petition approving a $400,000 transfer; trial court entered the proposed QDRO.
- September–October 2018: Plan administrator pre-approved increasing the transfer to $700,000; parties filed an amended joint petition for an amended QDRO.
- November 9, 2018: trial court denied the amended petition and vacated the initial QDRO, concluding no domestic relations matter justified a QDRO; court certified the order as final.
- Wife appealed; Superior Court considered whether a pending divorce or domestic relations matter is required to enter a QDRO and affirmed the trial court.
Issues
| Issue | Wife's Argument | Husband/Plan/Trial Court Argument | Held |
|---|---|---|---|
| Whether a QDRO may be entered absent a pending divorce or domestic relations matter | A pending divorce is not required; QDROs can be entered in other proceedings to recognize alternate payees (citing Brown v. Continental Airlines) | A QDRO is a procedural device adjunct to a domestic relations matter; here parties are married, not seeking divorce, and seek to move funds to circumvent ERISA anti-alienation | QDROs require a divorce or other domestic relations matter; trial court properly denied and vacated QDRO |
| Whether the proposed order met ERISA/QDRO statutory requirements | The proposed QDRO satisfied statutory elements and had Plan pre-approval | Even if statutorily sufficient, absent a domestic relations matter the QDRO would permit an impermissible alienation of benefits | Statutory form alone insufficient when no domestic relations basis exists; entry would violate ERISA policy |
| Whether plan administrator approval/control determines QDRO entry | Plan pre-approval means the QDRO should be honored | Plan approval does not free court from determining whether entry is appropriate under ERISA/domestic relations context | Plan pre-approval did not compel court to enter QDRO absent domestic relations basis |
| Whether parties can use QDRO to convert marital/plan funds into separate property while married | Parties argued they intended funds to remain marital but to move them to Wife’s IRA for investment reasons | Court viewed transfer as an attempt to alienate plan benefits absent domestic relations justification | Transfer denied; parties cannot use QDRO as mechanism to move ERISA funds outside a domestic relations context |
Key Cases Cited
- Boggs v. Boggs, 520 U.S. 833 (QDRO exception to ERISA anti-alienation protects spouses and dependents in divorce/separation context)
- Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825 (Congress amended ERISA to allow enforcement of QDROs for spousal/dependent support)
- Brown v. Continental Airlines, Inc., 647 F.3d 221 (5th Cir.) (plan administrators should not probe legitimacy of divorces when evaluating QDROs)
- Brown v. Brown, 669 A.2d 969 (Pa. Super. 1995) (retirement benefits are marital property subject to division on divorce)