PA Superior Court Says QDRO’s Take Effect Upon Execution of Marital Agreement
Conway v. Conway v. City of Erie Police Relief and Pension Association, 209 A.3d 367 (PA Super. 2019)
Brief Summary of the Facts:
Michael Conway (“Husband”) and Julie Conway (“Wife”) were married on July 12, 1991 and separated in August 2007. Husband was employed as a police officer and filed for divorce on July 28, 2009. The parties executed a Marital Settlement Agreement (“MSA”) on Aug. 19, 2016, that directed the parties to prepare, execute, and file a Qualified Domestic Relations Order (“QDRO”) to allow Wife to receive her marital share of Husband’s pension. At the time of the execution of the MSA, Husband’s pension plan stated, with regard to a QDRO, “a former spouse of a Participant shall be treated as the spouse or surviving spouse for all purposes under the Plan.” A divorce decree was entered on Aug. 22, 2016, that incorporated the MSA. On Aug. 23, 2016, the municipality for which Husband worked amended the pension plan to read “a former spouse of a Participant shall not be treated as the spouse or surviving spouse for any purposes under the Plan,” (emphasis added). Wife submitted the QDRO to the pension plan administrator on Aug. 29, 2016, which denied the QDRO on the basis that as it was filed after the Aug. 23, 2016 pension plan revision and is inconsistent with the same. Wife filed a Motion for Entry of QDRO, which was denied by the trial court, prompting Wife to appeal to Superior Court.
Did the trial court err by failing to enter the QDRO submitted by Wife to secure her post-divorce rights to Husband’s pension when the MSA and Divorce Decree were both filed/entered and in effect prior to the revision to the pension plan? Holding A QDRO is an order “which creates or recognizes the rights of an alternate payee to receive all or a portion of the benefits payable to a participant under [a pension] plan.” A QDRO merely implements the terms of a preexisting MSA and does not in itself create new rights or terms. In the instant matter, the MSA was entered and incorporated into a Divorce Decree before the pension plan was revised; therefore, as the QDRO only serves to recognize and implement settled rights, it is enforceable as the underlying MSA predates the pension plan revisions. The denial of the QDRO amounts to an unlawful ex post facto application of the revised pension plan. Based on the above, the court directed the QDRO to be entered.
The court also pointed out that the objective of the Divorce Code “is to effectuate economic justice” for the parties to a divorce. In the court’s estimation, to rule against Wife “would deny [her] the benefit she bargained for and would cause an unfair and severe injustice concerning the parties’ settlement of their existing rights” and would be “contrary to the goal of achieving economic justice.”
Originally published in the Pennsylvania Family Lawyer in Volume 41, Issue number 3 (Autumn 2019)