Current through Register Vol. XLI, No. 24, June 14, 2024
Section 162-1-7 - Non-Alienation of Benefits: Divorce and Separation7.1. The moneys in each of the Retirement Systems and the right of a person to receive any benefit, whether it be an annuity, return of retirement contributions, or other benefit, are not subject to execution, attachment, garnishment, the operation of bankruptcy or other insolvency laws. State or municipal taxation, or any other legal process whatsoever; and are not assignable nor transferable by any employee, retirant or beneficiary: Provided, That orders entered by a court of record and enforced by the Bureau for Child Support and Enforcement may be honored by the Board.7.2. In cases of divorce or legal separation, the annuity, refund of accumulated contributions, preretirement death benefit, or other payment available to a member, retirant or beneficiary of any Retirement System may be divisible by a Qualified Domestic Relations Order only as provided in this rule. The Board shall not honor as a Qualified Domestic Relations Order any Domestic Relations Order seeking to divide a pension benefit of a member, retirant or beneficiary which does not meet the requirements of this rule. 7.2.a. In cases of divorce or legal separation where the member's or retirant's interest in his or her retirement account is subject to division as marital property pursuant to state domestic relation law, that portion of the member's or retirant's retirement account which constitutes marital property and which is subject to division by a Qualified Domestic Relations Order shall be determined by the Board by using the following formula, but only after the benefits are available to the member or retirant at death, refund, disability retirement or retirement: the marital property portion of a member's or retirant's retirement benefit which is subject to division shall be computed by the Board by multiplying the Vested Accrued Retirement Benefit, less all benefits due to Exempt Service, by a fraction, the numerator being the number of years of contributing service incurred during the marriage, and the denominator being the total number of years of contributing service towards the pension at the date of separation or the date of divorce. In determining the marital property portion of a member's or retirant's benefit, the numerator used by the Board in the fraction shall not include the member's previously withdrawn service credit which was not repaid in full as of the date used by the parties as provided for in subdivision 7.2.b. of this rule.7.2.b. In any Qualified Domestic Relations Order which meets the requirements of this rule and which seeks to divide a member's or retirant's state retirement benefit, the parties, by agreement, or the court having jurisdiction of the parties domestic relations proceeding, may utilize either the parties' date of separation or the date of the divorce as their numerator in the marital share formula required by sub-division 7.2.a. of this rule.7.2.c. For the division of state pension benefits between a member or retirant and an alternate payee by a Qualified Domestic Relations Order which meets the requirements of this rule, the Board shall use a shared payment approach, with the alternate payee being paid an agreed upon or court ordered percentage of the marital property portion of the member's or retirant's Vested Accrued Retirement Benefit at the same time and in the same form as the benefit elected by and paid to the member once he or she enters pay status: Provided, That for the Teachers' Defined Contribution Plan, the Board shall use a separate payment approach, with the interest awarded to the altenate payee being divided upon acceptance of the Qualified Domestic Relations Order, and being placed into an individual account in the name of the alternate payee for further investment in accordance with the alternate payee's direction, and for payment at the time or times that are permissible under the plan and applicable federal or state law.7.2.d. Unless otherwise specifically agreed to by the parties in their Qualified Domestic Relations Order or ordered by the Court having jurisdiction of the parties' domestic relation proceeding, the tax basis and any post-retirement cost of living increases shall be applied to the benefit of both the member or retirant and the alternate payee proportionate to the division of the Vested Accrued Retirement Benefit.7.2.e. Qualified Domestic Relations Orders shall contain all of the following in order to meet the requirements of this rule:7.2.e.1. The name and last known address of the participant and the alternate payee;7.2.e.2. The name of the state retirement plan to which the Qualified Domestic Relation Order applies; and7.2.e.3. The percentage of the marital property portion of the member's or retirant's Vested Accrued Retirement Benefit which is to be paid to the alternate payee.7.2.f. For a Qualified Domestic Relations Order to be acceptable and honored by the Board, the order may not require the member's retirement plan to provide the alternate payee with any type or form of benefit, or any option, not otherwise provided under the plan; may not require the plan to provide for increased benefits determined on the basis of actuarial value; may not require the plan to pay benefits to an alternate payee which are required to be paid to another alternate payee under a prior Qualified Domestic Relations Order; may not require the plan to pay benefits to an alternate payee in the form of a qualified joint and survivor annuity for the lives of the alternate payee and his or her subsequent spouse; and may not require the plan to pay the alternate payee more than 100% of the marital property portion of the member's benefits, as defined and calculated in accordance with subdivision 7.2.a. of this rule, except as permitted by the rules as ser forth in subdivision 7.2.g. of this rule.7.2.g. The following additional restrictions apply:7.2.g.1. Public Employees Retirement System and Deputy Sheriff Retirement System: A Qualified Domestic Relations Order may not require the member or retirant to elect any particular form of pre or post retirement benefit available under the plan, may not prohibit the member or retirant from changing the form of benefit if one has already been elected and such a change is otherwise permitted by the plan, and may not require the alternate payee be treated as the surviving spouse of the member or retirant for purposes of any pre or post retirement benefit if such an option has been or is elected by the member or retirant. This rule shall not be construed to prohibit a member or retirant from entering into a voluntary agreement, or being subject to an order from a state court of competent jurisdiction, which requires the member or retirant to elect a particular form of benefit available to him or her under the plan, or which prohibits the member or retirant from changing the form of benefit already elected by him or her where such a change is otherwise permitted by the plan, or which requires the member or retirant to select the alternate payee as the surviving spouse of the member or retirant for purposes of any benefit elected by the member or retirant; however, such restriction cannot be contained within a Qualified Domestic Relations Order and cannot be enforced by the Board: Provided, That a Qualified Domestic Relations Order with respect to a retirant who has already retired as of the date of entry of the order may prohibit a retirant who elected a joint and survivor annuity option upon retirement from changing said joint and survivor annuity to a life annuity upon the retirant's divorce; and further provided that a Qualified Domestic Relations Order with respect to a retirant who has retired as of the date of entry of the order may also prohibit the retirant from naming a new spouse as an annuitant for any retirement benefit option available under the plan to a retirant who divorces and remarries after retiring.7.2.g.2. Teachers' Retirement System: A Qualified Domestic Relations Order may not require the member or retirant to elect any particular form of pre or post retirement benefit available under the plan, may not prohibit the member or retirant from changing the form of benefit if one has already been elected and such a change is otherwise permitted by the plan, and may not require the alternate payee to be treated as the surviving spouse of the member or retirant for purposes of any pre or post retirement benefit, if such an option has been or is elected by the member or retirant. This rule shall not be construed to prohibit a member or retirant from entering into a voluntary agreement, or being subject to an order from a state court of competent jurisdiction, which requires the member or retirant to elect a particular form of benefit available to him or her under the plan, or which prohibits the member or retirant from changing the form of benefit already elected by him or her where such a change is otherwise permitted by the plan, or which requires the member or retirant to select the alternate payee as the surviving spouse of the member or retirant for purposes of any pre or post retirement benefit available under the plan; however, such restrictions cannot be contained within a Qualified Domestic Relations Order itself or enforced by the Board: Provided, That a Qualified Domestic Relations Order with respect to a retirant who has retired as of the date of entry of the order may prohibit the retirant from naming a new spouse as an annuitant for any retirement benefit options available under the plan to a retirant who divorces and remarries after retiring.7.2.g.3. West Virginia Municipal Police Officers and Firefighters Retirement System; West Virginia State Police Retirement System; and Emergency Medical Services Retirement System: A Qualified Domestic Relations Order may not require the member or retirant to elect any particular form of benefit available under the plan, may not prohibit the member or retirant from changing the form of benefit if one has already been elected by the member or retirant and such a change is otherwise permitted by the plan, and may not require the alternate payee to be treated as the surviving spouse of the member or retirant for purposes of any pre or post retirement benefit, if such an option is elected by the member or retirant. This rule shall not be construed to prohibit a member or retirant from entering into a voluntary agreement, or being subject to an order from a state court of competent jurisdiction, which requires the member or retirant to elect a particular form of benefit available to him or her under the plan, or which prohibits the member or retirant from changing the form of benefit already elected by him or her, or which requires the member or retirant to select the alternate payee as the surviving spouse of the member or retirant for purposes of any pre or post retirement benefit available under the plan; however, such restrictions cannot be contained within a Qualified Domestic Relations Order itself or enforced by the Board.7.2.g.4. West Virginia State Police Death, Disability and Retirement Fund; and Retirement System for Judges of Courts of Record: A Qualified Domestic Relations Order may not require the alternate payee to be treated as the surviving spouse of the member or retirant for purposes of any pre or post retirement benefit available under the plan.7.2.h. In cases of divorce or legal separation in which the Court of record enters a division order in accordance with the formula and the requirements of this rule, the Board shall make separate payments to the member or retirant and the alternate payee in accordance with that order. Payments to the alternate payee shall be prospective only and shall commence upon pay status to the member or retirant and following the Board's receipt and acceptance of the entered Qualified Domestic Relations Order.7.2.i. In cases of divorce or legal separation, the Qualified Domestic Relations Order shall contain a prohibition against the member obtaining a loan under W. Va. Code § 18-7A-34 or W. Va. Code § 7-14D-23. Provided, That, a member may borrow from that portion of his or her individual account not subject to the Qualified Domestic Relations Order.7.2.j. Procedure: Within 30 days of receipt of a Domestic Relations Order, the Board's staff shall notify, in writing, the parties identified in the Domestic Relations Order as the member or retirant and alternate payee, or their counsel if represented, of the receipt of the Domestic Relations Order. At this time. Board staff shall also notify said parties or counsel whether the Domestic Relations Order has been determined to meet the requirements for a Qualified Domestic Relations Order, or whether Board staff requires additional time or additional information to complete such a determination. If Board staff determines the Domestic Relations Order fails to meet the requirements for a Qualified Domestic Relations Order, said parties shall be notified in writing by mail, and such notification shall contain an explanation for the denial. In the event the Board determines the Domestic Relations Order is not a Qualified Domestic Relations Order, it shall be the duty of the member or retirant and alternate payee to cooperate and do all things reasonably necessary to devise and submit to the Board an order which is acceptable to the Board and which is consistent with this rule and applicable law. One or both parties may appeal a determination by Board staff that a Domestic Relations Order fails to meet the requirements for a Qualified Domestic Relations Order pursuant to the Board's Benefit Determination and Appeal Rules.