MODEL ELIGIBLE DOMESTIC RELATIONS ORDER FOR

MODEL ELIGIBLE DOMESTIC RELATIONS ORDER

FOR MEMBERS AND FORMER MEMBERS OF THE

MARYLAND STATE RETIREMENT AND PENSION SYSTEM

Important:

This Model is presented for informational purposes

only and should not be taken as legal advice.

We encourage parties to submit a Draft Domestic

Relations Order (DRO) for review before

submitting the DRO to the court for signature.

Draft DROs should be sent in a PDF format via

email to [email protected]ate.md.us. You must include

the Member or former member’s full name and

address in the email transmitting the draft. To

allow for processing, do not send password-

protected files and do not send via secure email.

Maryland State Retirement Agency

April 27, 2022

Introduction

This Model Eligible Domestic Relations Order (“Model”) contains model

language for attorneys who are involved in the preparation of a Domestic Relations Order

(“DRO”) that addresses the plan benefits of a member or former member of the Maryland

State Retirement and Pension System (“MSRPS”).

Regulations promulgated by the Board of Trustees for the MSRPS provide that

the MSRPS will administer a DRO submitted by the parties only if it constitutes an

“Eligible Domestic Relations Order” that satisfies all of the requirements set forth in the

Code of Maryland Regulations (“COMAR”) 22.01.03.03. The purpose of this Model is

to assist parties and their attorneys in a divorce in preparing a DRO that will be eligible

for processing by the Agency. The Model and this introduction are presented for

informational purposes only and should not be taken as legal advice or relied upon

for that purpose. The Maryland State Retirement Agency (“Agency”) does not advise

participants, former spouses (“alternate payee”), or attorneys about how to draft a DRO

that best suits the wishes and intentions of the parties. This is the task of the parties and

attorneys involved. Participants and spouses are strongly urged to seek the advice of

their own attorney or attorneys regarding the matters discussed in this Model.

The requirements that must be satisfied for the Agency to honor a DRO are set

out in Division II of the State Personnel and Pensions Article (“SPP”), Md. Code Ann.,

and in COMAR 22.01.03. This Model is based upon the Agency’s current understanding

of the law and is not intended to be a substitute for Maryland law or the rules and

regulations governing the MSRPS, which are subject to change.

We encourage parties to submit a draft Domestic Relations Order (DRO) for

review before submitting the order to the court for signature. Draft DROs should be sent

in a PDF format via email to [email protected]. You must include the member or

former member’s full name and address in the email transmitting the draft. To allow for

processing, do not send password-protected files and do not send via secure email.

The Agency reviews draft DROs as a service to the parties but does not grant

“pre-approvals.” All Final Orders will be reviewed again for compliance with the

Agency’s regulations upon submission. A true-test copy of the Final Order must be

submitted to the Agency for processing. The Board of Trustees’ regulations require the

alternate payee (former spouse) to promptly submit a certified or true-test copy of a DRO

and any modifications or amendments to the DRO to the Agency.

The following points should be considered:

1. Exemption from ERISA’s requirements regarding Qualified Domestic Relations

Orders. As a government-sponsored plan, the MSRPS is exempt from the

requirements regarding Qualified Domestic Relations Orders contained in Title I of

the Employee Retirement Income Security Act of 1974 (“ERISA”). A DRO that

makes general reference to ERISA or is labeled as a Qualified Domestic Relations

Order or “QDRO” will not be accepted. COMAR 22.01.03.03B(13). Unlike ERISA

plans, in the absence of an appropriate court order, a participant may take any action

with regard to his or her benefits without any notice or consent. Additionally, an

alternate payee’s rights are entirely derivative of the participant’s rights. To that end,

an alternate payee may not elect beneficiaries or choose retirement options.

2. MSRPS and State System. The MSRPS administers death, disability and retirement

benefits on behalf of more than 400,000 participants in accordance with Division II of

the State Personnel and Pensions Article of the Annotated Code of Maryland. The

MSRPS consists of a number of individual State systems: Correctional Officers’

Retirement System, Employees’ Pension System, Employees’ Retirement System,

Judges’ Retirement System, Legislative Pension Plan, Local Fire and Police System,

Law Enforcement Officers’ Pension System, State Police Retirement System,

Teachers’ Pension System, and Teachers’ Retirement System. A DRO must

specifically identify the name of the individual State system to which it applies.

COMAR 22.01.03.03B(1)(a).

3. Plan Benefit. A DRO must clearly address the types of plan benefits that are to be

divided by the court. The regulations and this Model address the common types of

plan benefits and are designed to give the most commonly used meanings to words

most often encountered in DROs. However, with numerous individual State systems

administered by the Agency, the regulations and this Model cannot address each type

of benefit that may be available to a participant in a particular State system. Before

drafting, attorneys are advised to consult a benefits handbook or contact a benefits

specialist at the Agency to acquaint themselves with the various benefits that are

available under the participant’s State system. Benefits specialists are available by

telephone at (410) 625-5555, or (800) 492-5909. Benefits information, including the

benefits handbook for several of the systems, is also available on the MSRPS website,

www.sra.maryland.gov. A few points should be considered:

a. Allowance. Unless otherwise specified, the term “allowance” is defined by

regulation to include the following: service retirement allowance, disability

retirement allowance, vested allowance, and cost of living adjustments.

Additionally, except when the statute requires payment exclusively to a surviving

spouse, minor child, or dependent parent, the term allowance includes a lump sum

payment of the amount accrued in the Deferred Retirement Option Program on

termination of participation.

b. Marital Share Formula. Under the Board of Trustees’ regulations, the Alternate

Payee’s share of a plan benefit may be expressed as a fixed dollar amount, a fixed

percentage, or a formula that clearly divides a plan benefit. The regulations

provide criteria for the acceptance of a formula to divide a plan benefit. The

Alternate Payee’s share may not exceed the amount of the Participant’s plan

benefit nor can an Alternate Payee be assigned service credit that exceeds the

amount of service credit earned by the Participant.

Typically, parties use the following formula to divide the plan benefits earned during a

marriage:

Total months of service credit

received by the participant

during the marriage

_______________________ = The “Marital

Total months of

Share Fraction”

service credit

Alternate Payee’s share = Marital Share Fraction x ___%

This formula is described in the Model as follows:

The alternate payee’s share of the participant’s allowance is declared to

be the “marital share fraction” multiplied by

. The “marital share

fraction” is the following fraction: the numerator is the total number of

months of service credit received by the PARTICIPANT during the

parties’ marriage, up until and including the date of the Judgment of

Divorce, and the denominator is the total number of months of the

PARTICIPANT’S service credit in the State System.

c. Pre-retirement death benefits. Most systems within the MSRPS provide death

benefits to the designated beneficiary of a member who dies during employment.

In such instances, a DRO may require a participant to designate an alternate payee

as the beneficiary or assign a portion of any death benefits to an alternate payee.

However, some systems within the MSRPS, such as the State Police Retirement

System, Law Enforcement Officers’ Pension System, and the Judges’ Retirement

System, provide statutorily-prescribed pre-retirement death benefits to a

participant’s current surviving spouse, qualifying child(ren), or a surviving

dependent parent, rather than to a designated beneficiary. In addition, a special

“line of duty” pre-retirement death benefit may be payable to the surviving spouse

or qualifying child(ren) of a member of certain State Systems whose death arose

out of and in the course of actual performance of duty. In the event of “plan-

determined” death benefit that is payable to a current surviving spouse, qualifying

child(ren) or dependent parent, no portion of the death benefit may be assigned to

an alternate payee under a DRO.

d. Post-Retirement Survivor Benefits. At the time of retirement, some State systems

permit a participant to select a reduced allowance in order to provide post-

retirement survivor benefits to a designated beneficiary. These are optional

benefits that will flow to a designated beneficiary following the death of a retiree.

Several points should be considered:

• Description of options. In most systems within the MSRPS, six different

types of optional post-retirement survivor benefits are available and are

described in the statute at SPP §21-403.

• One beneficiary. Four of the options provide for a survivor annuity,

meaning monthly payments to a designated beneficiary for life. In the

case of a survivor annuity, only one individual may be designated as the

beneficiary. SPP §21-402(b). Thus, if the parties wish for the participant

to designate the alternate payee as the beneficiary of an optional survivor

annuity (currently Options 2, 3, 5 and 6), the DRO must provide that the

participant shall designate and maintain the alternate payee as the sole

beneficiary. Please note that such an action will preclude the participant

from designating a different beneficiary (such as a current spouse) at the

time of retirement.

• Spousal Survivor Benefits for State Police Retirement System, Law

Enforcement Officers’ Pension System, and Judges’ Retirement System.

Some systems, such as the State Police Retirement System, Law

Enforcement Officers’ Pension System, and the Judges’ Retirement

System, provide post-retirement survivor benefits to participant’s current

surviving spouse, qualifying child(ren), or dependent parent rather than to

a designated beneficiary. Because these “plan-determined” survivor

benefits are payable by virtue of the surviving spouse’s or qualifying

child/dependent parent’s status, no portion of these benefits can be

assigned to an alternate payee under a DRO. However, a participant may

have the option to select a retirement option and designate a beneficiary if

the participant is not married at the time of retirement, and in such an

instance, a DRO may require a participant to designate an alternate payee

as the beneficiary or assign a portion of benefits payable to a designated

beneficiary to an alternate payee.

4. Out-of-State Domestic Relations Orders. If submitting a DRO that has been issued

in a state other than Maryland, two points should be considered:

a. Cite to proper legal authority. Please note that an out-of-state DRO must cite to

the statutory scheme for dividing pension benefits in a divorce of the state where

the order is executed. The proper legal authority for the out-of-state order will

replace the introductory language stated in paragraph 6 of this Model, which

references the Maryland Law.

b. Filing under Uniform Enforcement of Foreign Judgments Act. An out-of-state

DRO that divides pension benefits in Maryland, must include verification that the

DRO has been appropriately filed in a Circuit Court in Maryland in accordance

with § 11-802 of the Uniform Enforcement of Foreign Judgments Act, Md. Code

Ann., Courts and Judicial Proceedings. The Agency requires a true test copy of

the DRO filed in and stamped by a Circuit Court in Maryland as such verification.

IMPORTANT INSTRUCTIONS FOR USING THE MODEL

This model provides a basic format for use in preparing a DRO. Various

alternatives for dividing benefits are offered. THIS MODEL IS NOT

INTENDED AS A CHECK-OFF FORM. ANY ALTERNATIVES THAT

ARE NOT SELECTED MUST BE REMOVED FROM THE DRO BEFORE

SUBMISSION.

________________________ * IN THE

Plaintiff * CIRCUIT COURT

v. * FOR

________________________ * ____________________

Defendant * Case No. ____________

* * * * * * * * * * * *

ELIGIBLE DOMESTIC RELATIONS ORDER

Upon consideration of the Judgment of Absolute Divorce entered in the

above-captioned case, it is this _____ day of _________, _______, ORDERED,

1. This Order relates to the disposition of certain benefits of

[name o

PARTICIPANT] to be provided by the [name of indi

vid

ual

tirement or

pension system withi

n the MSRPS

] (“State System”), which is part of the

MARYLAND STATE RETIREMENT AND PENSION SYSTEM

(“MSRPS”).

2. The parties hereto were married on [date of

marriage]

, and this Order is entered

incident to a final Judgment of Absolute Divorce entered on [

date of divorce]

3. The PARTICIPANT is identified as follows:

Name: [name of PARTICIPANT

]

Address: [address]

D.O.B. /SS#: The PARTICIPANT’S date of birth and social

security number must be provided in the letter

transmitting this Order to the MSRPS.

4. The ALTERNATE PAYEE is identified as follows:

Name:

[name of ALTERNATE PAYEE]

Address: [address]

D.O.B. /SS#: The ALTERNATE PAYEE’S date of birth and

social security number must be provided in the

letter transmitting this Order to the MSRPS.

5. The administrator of the MSRPS is:

Maryland State Retirement Agency (“AGENCY”)

120 East Baltimore Street

Baltimore, Maryland 21202

Attn: Eligible Domestic Relations Orders

6. To accommodate the marital property distribution between the parties, in

accordance with Md. Code Ann. Family Law Article, §§ 8-202 and 8-205 and

COMAR 22.01.03, IT IS HEREBY ORDERED AS FOLLOWS:

A. Allowance. The ALTERNATE PAYEE’S share of the PARTICIPANT’S

allowance is declared to be

(Choose Alternative i., ii. or iii.)

[$____ dollar am

ount]

ii. [___ percentage]

iii. [___ percentage ( %)] multiplied by the “marital share fraction.” The

“marital share fraction” is the following fraction: the numerator is the total

number of months of service credit received by the PARTICIPANT during

the parties’ marriage, up until and including the date of the Judgment of

Divorce, and the denominator is the total number of months of the

PARTICIPANT’S service credit in the State System.

B. Refund of accumulated contributions If the PARTICIPANT elects to

receive any refund of accumulated contributions, or any other lump sum

distribution of a Plan Benefit not addressed elsewhere herein, the

ALTERNATE PAYEE’s share is declared to be:

(Choose Alternative i., ii. or iii.)

[$____ dol

lar

amo

unt

]

ii. [___ percentage]

iii. [___ percentage ( %)] multiplied by the “marital share fraction,” as

defined in paragraph 6A.

C. Pre-retirement death benefit.

(Choose Alternative i., ii. or iii. If Alternative iii. is selected, also choose

Selection (1), (2) or (3))

i. No share of any pre-retirement death benefit payable with respect to the

PARTICIPANT is assigned to the ALTERNATE PAYEE under the terms

of this Order.

ii. If permitted by the terms of the State System, the PARTICIPANT shall

designate and maintain the ALTERNATE PAYEE as the sole primary

beneficiary of any pre-retirement death benefit that is payable from the

State System to a designated beneficiary, for the ALTERNATE

PAYEE’S lifetime.

iii. If a pre-retirement death benefit is payable to a designated beneficiary

with respect to the PARTICIPANT, and if the ALTERNATE PAYEE

survives the PARTICIPANT, the ALTERNATE PAYEE’S share of the

pre-retirement death benefit is declared to be:

(If Alternative iii. is selected, also choose Selection (1), (2) or (3).)

(1) [$____ dollar amount]

(2) [___ per

cen

tage

]

(3) [___ percentage

(

%)]

multiplied by the “marital share fraction,” as

defined in paragraph 6A.

D. Post-retirement survivor benefit.

(Choose Alternative i., ii., or iii., and make any Selections required under the

chosen Alternative)

i. At retirement, if and as permitted by the terms of the State System, the

PARTICIPANT may (but is not required to) select an optional form of

allowance providing for a post-retirement survivor benefit for a

designated beneficiary, and may designate an individual other than the

ALTERNATE PAYEE as the beneficiary of any post-retirement survivor

benefit. The PARTICIPANT may select any optional form of allowance

permitted under the terms of the State System that provides for a post-

retirement survivor benefit (either annuity or lump-sum benefit, if

applicable.)

(If Alternative i. is selected, choose Selection (1) or (2).)

(1) No share of any post-retirement survivor benefit is assigned to the

ALTERNATE PAYEE under the terms of this Order.

(2) If a post-retirement survivor benefit is payable to a designated

beneficiary upon the death of the PARTICIPANT, and if the

ALTERNATE PAYEE survives the PARTICIPANT, the

ALTERNATE PAYEE’S share of the post-retirement survivor

benefit payable with respect to the PARTICIPANT is declared to be:

(If Selection i(2) is chosen, also choose Selection (a), (b) or (c).)

(a)

[$____ dollar a

mount]

(b) [___ percentage]

)]

multiplied by the “marital share fraction,”

as defined in paragraph 6A.

ii. At retire

ment, if and as permitted by the terms of the State System, the

PARTICIPANT shall select an optional form of allowance providing for a

post-retirement survivor benefit for a designated beneficiary, and shall

designate and maintain the ALTERNATE PAYEE as the sole primary

beneficiary, for the ALTERNATE PAYEE’S lifetime.

(If Alternative ii. is selected, choose Selection (1) or (2).)

(1) The PARTICIPANT shall select Option Number

[___].

(2) The PARTICIPANT shall select any Optional form of allowance

permitted under the terms of the State System that provides for a post-

retirement survivor benefit (either annuity or lump-sum benefit, if

applicable.)

iii. At retirement, the PARTICIPANT shall select the basic allowance and may

not select an optional form of allowance that provides for a post-retirement

survivor benefit.

E. Method and timing of payment; restrictions. MSRPS is hereby directed

to make payments of the ALTERNATE PAYEE’S share directly to the

ALTERNATE PAYEE, if, when, and as payments of PARTICIPANT’S Plan

Benefit are made to PARTICIPANT, in any form selected by the

PARTICIPANT that is permitted by the State System. The ALTERNATE

PAYEE’S share may not exceed the amount of the PARTICIPANT’S plan

benefit.

F. Limitations. This Order does not and cannot apply to any pre-retirement

death benefit or post-retirement survivor benefit that is statutorily required to

be paid to a PARTICIPANT’S surviving relative.

G. Transfers. If the PARTICIPANT transfers from the State System to any

other retirement or pension system (“transferee system”) that is administered

by the AGENCY and that gives credit for service under the State System, then

this Order shall apply to any benefits provided by such transferee system to the

extent that such benefits are payable under the terms of the transferee system.

The AGENCY is not liable to make further payments to the ALTERNATE

PAYEE if the PARTICIPANT transfers to another retirement or pension

system that is not administered by the AGENCY.

H. Obligations of Alternate Payee – not obligations of MSRPS or

AGENCY. It is the obligation of the ALTERNATE PAYEE to promptly:

i. Provide the AGENCY a certified or true-test copy of this Order, and

modifications or amendments hereto;

ii. Provide the AGENCY the following information in written correspondence

accompanying the submission of this Order:

(1) The social security numbers and dates of birth of the PARTICIPANT

and the ALTERNATE PAYEE, and

(2) The current address and current telephone number of the

ALTERNATE PAYEE;

iii. Submit documentation to the AGENCY to verify the ALTERNATE

PAYEE’S date of birth;

iv. When the ALTERNATE PAYEE becomes eligible to receive a monthly

allowance, submit the required forms to commence receipt of the

allowance by electronic fund transfer;

v. Notify the AGENCY in writing of:

(1) The death of the PARTICIPANT; or

(2) Any change of the ALTERNATE PAYEE’S name, address or

telephone number; and

vi. Comply with all reasonable requests from the AGENCY for information

and documentation necessary for processing payment of all or any portion

of a PARTICIPANT’S plan benefit to the ALTERNATE PAYEE.

I. Obligations of Participant – not obligations of MSRPS or AGENCY. It

is the obligation of the PARTICIPANT to promptly:

i. Submit any applications or forms required by the AGENCY to effectuate

any provision of this Order, including, but not limited to, any form required

by the AGENCY to designate the ALTERNATE PAYEE as beneficiary.

ii. Notify the AGENCY in writing of:

(1) The death of the ALTERNATE PAYEE; or

(2) Any change of the PARTICIPANT’S name, address or telephone

number; and

iii. Comply with all reasonable requests from the AGENCY for information

and documentation necessary for processing payment of all or any portion

of a PARTICIPANT’S plan benefit to the ALTERNATE PAYEE.

If the PARTICIPANT fails to comply with or takes any action in

contravention of any provision of this Order, including, but not limited to, this

Paragraph 6, the PARTICIPANT shall bear the sole and exclusive liability for

such action, and not the MSRPS or the AGENCY.

J. Tax consequences of payments. All payments to the alternate payee shall

be includable in the taxable income of and taxable to the alternate payee

in accordance with the applicable provisions of the Internal Revenue Code,

Treasury regulations, and other guidance. After-tax contributions shall be

allocated to the parties in the same proportion as the total amount of the

alternate payee’s share bears to the participant’s total plan benefit.

K. No requirement to retire. No provision of this Order shall be construed

to require the PARTICIPANT to retire at any particular age or length of

service.

7. This Court retains jurisdiction to amend this Order for the purpose of its

acceptance and/or administration by the MSRPS or any transferee retirement

system or to effectuate the terms of the parties’ Settlement Agreement and/or

Judgment of Divorce.

____________________________

Judge

Circuit Court for _______________

Consented as to form and content:

______________________

PARTICIPANT

______________________

ALTERNATE PAYEE

________________________

Attorney for Participant

[Add

ress and telephon

________________________

Attorney for Alternate Payee

[Address and telephone]