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PBGC Issues New Information Booklet on Domestic Relations Orders and PBGC

WASHINGTON, Sept. 11 /PRNewswire/ -- The Pension Benefit Guaranty Corporation (PBGC) today issued a new booklet to help attorneys and others who prepare domestic relations orders in a divorce or legal separation to divide pension benefits payable by PBGC.

"Our new guide should help to address some of the critical questions put to PBGC. Husbands, wives, dependents, lawyers, court officials rely on us to provide answers about how to share one of the most important family assets," said Secretary of Labor Robert B. Reich, Chairman of PBGC's Board of Directors.

The booklet reviews PBGC requirements for court orders that divide pensions. PBGC is responsible for nearly 2,100 terminated plans covering some 400,000 workers and retirees. As trustee of a plan, PBGC pays pension benefits, subject to legal limits, to plan participants and beneficiaries. PBGC also will pay some or all of the benefits to an alternate payee (a spouse, former spouse, child, or other dependent of a plan participant) who submits a qualified domestic relations order that meets specified legal requirements.

"A pension often is a person's largest asset. When there is a divorce, attorneys need to know how best to protect spousal pension benefits in plans that PBGC administers," said PBGC Executive Director Martin Slate.

PBGC reviews a submitted domestic relations order to determine whether the order satisfies legal and PBGC requirements before the agency may pay benefits to an alternate payee. The booklet, "Divorce Orders & PBGC," includes two types of model orders that may be used to draft domestic relations orders for PBGC. The booklet also discusses PBGC's review process and includes the checklist the agency uses to ensure that an order meets requirements.

Among other requirements, a qualified domestic relations order must specifically identify the plan participant and each alternate payee as well as the pension plan to which the order applies. The order must state the amount to be paid to the alternate payee, the form in which the payments are to be made, and when payments start and stop. The order also should address what happens when the participant or the alternate payee dies.

Copies of the booklet and additional information about submitting a domestic relations order to PBGC may be obtained by calling PBGC's Customer Service Center at 1-800-400-PBGC or writing to the PBGC QDRO Coordinator, P.O. Box 19153, Washington, DC 20036-0153. The booklet also is available from the PBGC Homepage on the World Wide Web, at:

PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by nearly 42 million American workers and retirees participating in private- sector defined benefit pension plans. PBGC insures about 55,000 pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.

Under ERISA, PBGC may not divide the pension of a person involved in a divorce unless it receives a qualified domestic relations order (QDRO). The model QDROs and accompanying guidance in PBGC's booklet, "Divorce Orders & PBGC," are intended to assist parties by making it easier to comply with statutory requirements. Under the Paperwork Reduction Act, an agency may not conduct or sponsor and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. This collection of information has been approved by the Office of Management and Budget (OMB) under control number 1212-0054 (expires 03/31/97). The information provided to PBGC may be disclosable under the Freedom of Information Act and the Privacy Act.

PBGC estimates that the average burden of preparing a QDRO with the assistance of PBGC's booklet will be 1/4 hour of the alternate payee's time and $400 in professional fees if the alternate payee hires an attorney or other professional to prepare the QDRO or 10 hours of the alternate payee's time if the alternate payee prepares the QDRO without hiring an attorney or other professional. Comments concerning the accuracy of this estimate or suggestions for further reducing this burden may be sent to Pension Benefit Guaranty Corporation, Office of the General Counsel, 1200 K Street, N.W., Washington, D.C. 20005-4026.

SOURCE Pension Benefit Guaranty Corporation
 -0- 09/11/96

/CONTACT: Judith Welles, director, communications & public affairs, or Andy Gasparich, public affairs officer, 202-326-4040, both of the Pension Benefit Guaranty Corporation/

CO: Pension Benefit Guaranty Corporation ST: District of Columbia IN: FIN SU: PDT EXE

KS-DS -- DCW016 -- 5001 09/11/96 11:06 EDT
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Publication:PR Newswire
Date:Sep 11, 1996
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