HB-4054, As Passed Senate, April 24, 2013

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4054

A bill to amend 1991 PA 46, entitled

"Eligible domestic relations order act,"

by amending sections 2 and 10 (MCL 38.1702 and 38.1710), section 2

as amended by 2008 PA 348.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 2. As used in this act:

(a) "Alternate payee" means a spouse of a participant under a

judgment of separate maintenance, or a former spouse, child, or

dependent of a participant, who is named in an eligible domestic

relations order.

(b) "Benefit" means an annuity, a pension, a retirement

allowance, or an optional benefit accrued or accruing to a

participant under a retirement system or a postretirement subsidy

payable to a participant under a retirement system.

order of a court made ~~pursuant~~ according to the domestic relations

law of this state and relating to the provision of alimony

payments, child support, or marital property rights to a spouse of

a participant under a judgment of separate maintenance, or to a

former spouse, child, or dependent of a participant.

(d) "Earliest retirement date" means the earliest date on

which a participant meets all of the requirements for retirement

under a retirement system except for termination of employment.

(e) "Eligible domestic relations order" or "EDRO" means a

domestic relations order that is considered an eligible domestic

relations order under section 11 or that meets all of the following

requirements:

(i) The domestic relations order states the names and last

known addresses of the participant and alternate payee.

(ii) The domestic relations order refers to the attachment to

the domestic relations order described in subparagraph (ix).

(iii) The domestic relations order states the amount or

percentage of the benefit to be paid to an alternate payee, or the

manner under which the retirement system is to determine the amount

or percentage of the benefit to be paid to an alternate payee.

(iv) The domestic relations order states that it applies to the

retirement system and that the retirement system shall make

payments to the alternate payee as required under the eligible

domestic relations order and this act.

(v) The domestic relations order does not require the

retirement system to provide a type or form of benefit not provided

by the retirement system or a form of payment not provided by this

act.

(vi) The domestic relations order does not require the

retirement system to provide an increased benefit determined on the

basis of actuarial value.

(vii) The domestic relations order does not require the payment

of a benefit to an alternate payee that is required to be paid to

another alternate payee under a previously filed eligible domestic

relations order.

(viii) The domestic relations order is filed with the retirement

system before the participant's retirement allowance effective date

or the participant's death, whichever occurs first.

(ix) The domestic relations order requires that the social

security numbers of the participant and the alternate payee be sent

to the retirement system in an attachment to the order. The

attachment shall not be filed with the court, but shall be attached

to the domestic relations order when it is sent to the plan

administrator for approval.

(f) "Filed with the retirement system" means that the

retirement system has determined that the domestic relations order

submitted for filing is acceptable as an EDRO.

(g) ~~(f)~~ "Participant" means a member, deferred member, vested

former member, deceased former member, or retirant under the

retirement system.

(h) ~~(g)~~ "Postretirement subsidy" includes, but is not limited

to, all of the following:

(i) A supplemental annuity.

(ii) A supplemental payment to a participant.

(iii) A percentage increase to a benefit payable to a

participant.

(iv) Any other payment to a participant or increase to a

benefit payable to a participant, excluding health benefits.

(i) ~~(h)~~ "Retirement system" means a public employee retirement

system created and established by this state or any political

subdivision of this state.

Sec. 10. (1) ~~The~~ Except as otherwise provided in this section,

the retirement system shall, within a reasonable period of time

after receiving a domestic relations order, determine if the

domestic relations order is an EDRO under this act. If the

retirement system determines that the domestic relations order is

an EDRO under this act, the retirement system shall promptly notify

the participant and alternate payee named in the EDRO that the

domestic relations order is an EDRO. The retirement system shall

begin the payment of a benefit under this act ~~pursuant~~ according to

the EDRO and this act on the first day of the month following the

month in which the domestic relations order was determined to be an

EDRO or the first day of the month following the month in which a

benefit is payable under the EDRO and this act, whichever is later.

If the retirement system determines that the domestic relations

order is not an EDRO under this act, the retirement system shall

promptly notify the participant and alternate payee named in the

domestic relations order that the domestic relations order is not

an EDRO. The retirement system shall specify in the notice why the

retirement system determined that the domestic relations order is

not an EDRO under this act. A Except as otherwise provided in this

section, a determination by the retirement system that a domestic

relations order is not an EDRO under this act does not prohibit a

participant, alternate payee, or court from filing an amended

domestic relations order with the retirement system under this act.

(2) Upon the retirement system's receipt of the domestic

relations order, the participant's retirement allowance effective

date shall be stayed and shall not occur until either of the

following occur:

(a) The retirement system accepts the domestic relations order

for filing as an EDRO. In this instance, the participant's

retirement allowance effective date will occur as if the

participant's retirement allowance effective date had not been

stayed.

(b) Sixty days have passed starting on the date the retirement

system gives the participant and alternate payee notice that the

retirement system will not accept the domestic relations order for

filing as an EDRO because of a defect in the domestic relations

order that disqualifies it as an EDRO, unless otherwise provided in

this subsection. During this 60-day period, the parties may submit

to the retirement system an amended domestic relations order that

will qualify for filing as an EDRO. The retirement system shall

provide notice of rejection of any amended domestic relations

orders in the same manner set forth above, but there can only be

one 60-day period and only with respect to rejection of the first

domestic relations order submitted to the retirement system for

filing as an EDRO. If the 60-day period is applicable and the

parties submit in a timely manner a domestic relations order that

is acceptable as an EDRO, but the retirement system does not make

this determination until after expiration of the 60-day period, the

participant's retirement allowance effective date will be further

stayed until the retirement system makes this determination. If the

60-day period is applicable and the participant dies or the parties

fail to submit to the retirement system a domestic relations order

that qualifies as an EDRO before expiration of the 60-day period,

the retirement system shall not accept for filing as an EDRO any

domestic relations orders pertaining to the participant.

(3) If, upon receipt of a retirement application from a

participant, the retirement system determines that a previously

submitted domestic relations order that is intended to qualify as

an EDRO does not qualify as an EDRO, the retirement system shall

notify the participant and alternate payee stating the reasons why

the domestic relations order does not qualify as an EDRO, if the

retirement system has not already provided that notice. In cases

where notice is required to be given under this section, the

participant's retirement allowance effective date is stayed as

provided in this section.

(4) If an EDRO is filed with the retirement system, but the

participant and alternate payee wish to file an amended EDRO, they

may do so at any time before the participant's retirement allowance

effective date, or death, whichever occurs first. In this instance,

the participant's retirement allowance effective date will not be

stayed upon the submission of the domestic relations order. If the

participant and alternate payee fail to submit a domestic relations

order that qualifies as an EDRO before the participant's retirement

allowance effective date or before the participant's death,

whichever occurs first, the latest EDRO filed with the retirement

system governs. The EDRO cannot be amended, vacated, or otherwise

set aside after the retirement system has made the first payment

under the EDRO or after the participant dies, whichever occurs

first.

(5) The retirement system shall provide all notice it is

required to give to the participant or alternate payee under this

act by first-class mail addressed to the participant and alternate

payee at the address listed for each in the domestic relations

order submitted to the retirement system for filing as an EDRO. If

no address is listed for the participant in the domestic relations

order, the retirement system shall mail the notice to the last

known address of the participant that the retirement system has in

its files. If no address is listed for the alternate payee in the

domestic relations order, notice to the participant is notice to

the alternate payee. Notice is given if the retirement system

complies with this section and upon the date the notice is mailed.