SAMPLE SEPARATION AGREEMENT LANGUAGE
NY STATE PENSIONS
(DEFINED BENEFIT PLANS)
This model may be used for monthly pension plans provided
by New York State and Local Employees' Retirement System and
the New York State Teachers Retirement System.
Like all models it will need to be modified
to fit the exact circumstances of the parties’ agreement
and the rules of the plan.
ARTICLE
RETIREMENT BENEFITS
a. The [Wife / Husband] is a Participant in the [official plan name] (“Plan”). For purposes of dividing marital property, the [Wife / Husband] is an Alternate Payee who is granted a portion of the Participant’s Plan benefits as described below.
Note: Only a Shared Interest is permitted
b. Amount of Benefits Assigned: The parties shall cooperate in the preparation of a Domestic Relations Order (DRO) so that the HUSBAND / WIFE shall receive a shared interest of (______%) of the marital portion of the HUSBAND's / WIFE's service monthly pension. The marital portion of the benefit shall be determined in accordance with the New York State Court of Appeals decision in Majauskas v Majauskas, to wit: the benefit multiplied by a fraction where the numerator is the number of years, partial years and/or months of credited service earned during the marriage, and the denominator is the total number of years, partial years and/or months of credited service earned as of the date the Participant commences benefits. For purposes of determining the dates under Majauskas, the date of the marriage of the parties is ______and the date of cessation of marriage service is ______.
c. Amount of Benefits Assigned if the Participant retires under a disability benefit:
Choose one:
1. Alternate Payee’s distribution will be calculated using a hypothetical service retirement based on Participant’s salary and service as of the date of disability (Participant’s disability portion is separate).
2. Alternate Payee’s distribution will be calculated using the lesser of a hypothetical service retirement based on Participant’s salary and service as of the date of disability (Participant’s disability portion is separate) OR Participant’s disability retirement.
3. Alternate Payee’s distribution will be calculated using Participant’s disability retirement allowance.
d. Early Retirement Subsidies/Supplements and COLAs: The Alternate Payee is assigned a pro rata share (determined in the same manner as in Item 1 above) of any early retirement subsidies or supplements, cost-of-living adjustments or other post-retirement benefit increases, or any interim or temporary benefits that the Participant receives from the Plan.
e. Participant’s Death After Retirement:
Choose one:
1. Special Joint Allowance: This option provides the Participant with a reduced lifetime benefit based on the Participant’s and the Alternate Payee’s dates of birth. The amount payable to the Alternate Payee after the Participant’s date of death is the marital share identified above. If the Alternate Payee dies before the Participant, all payments stop at the Participant’s death. The Participant can only designate one beneficiary and the beneficiary cannot be changed.
2. Joint Allowance — Full: This option provides the Participant with a reduced lifetime benefit based on the Participant’s and the Alternate Payee’s dates of birth. If the Participant dies, the Alternate Payee will receive the Participant’s total monthly benefit for the rest of his/her life. If the Alternate Payee dies before the Participant, all payments will stop at the Participant’s death. The Participant can only designate one beneficiary and the beneficiary cannot be changed.
3. Joint Allowance — Half: This option provides the Participant with a reduced lifetime benefit based on the Participant’s and the Alternate Payee’s dates of birth. If the Participant dies, the Alternate Payee will receive one-half of the Participant’s monthly benefit for the rest of his/her life. If the Alternate Payee dies before the Participant, all payments will stop at the Participant’s death. The Participant can only designate one beneficiary and the beneficiary cannot be changed.
4. Joint Allowance — Partial 75%: This option provides the Participant with a reduced lifetime benefit based on the Participant’s and the Alternate Payee’s dates of birth. The Participant must elect the continuance of 75 percent of the retirement benefit payable to the Alternate Payee. If the Participant dies, the Alternate Payee will receive 75 percent of the amount the Participant had been receiving for the rest of his/her life. If the Alternate Payee dies before the Participant, all payments stop at the Participant’s death. The Participant can only designate one beneficiary and the beneficiary cannot be changed.
5. Joint Allowance — Partial 50%: This option provides the Participant with a reduced lifetime benefit based on the Participant’s and the Alternate Payee’s dates of birth. The Participant must elect the continuance of 50 percent of the retirement benefit payable to the Alternate Payee. If the Participant dies, the Alternate Payee will receive 50 percent of the amount the Participant had been receiving for the rest of his/her life. If the Alternate Payee dies before the Participant, all payments stop at the Participant’s death. The Participant can only designate one beneficiary and the beneficiary cannot be changed.
6. Joint Allowance — Partial 25%: This option provides the Participant with a reduced lifetime benefit based on the Participant’s and the Alternate Payee’s dates of birth. The Participant must elect the continuance of 25 percent of the retirement benefit payable to the Alternate Payee. If the Participant dies, the Alternate Payee will receive 25 percent of the amount the Participant had been receiving for the rest of his/her life. If the Alternate Payee dies before the Participant, all payments stop at the Participant’s death. The Participant can only designate one beneficiary and the beneficiary cannot be changed.
7. Five Year Certain: This option provides the Participant with a reduced lifetime benefit and the additional guarantee that, if he/she lives for less than five years after retirement, payments in the same amount he/she was receiving (without COLA) will be made to the beneficiary(ies) for the balance of the five-year period. If the Participant lives more than five years after retirement, he/she will continue to receive payments for his/her lifetime, but no payments will be made to any beneficiary(ies) or estate when the Participant dies. The beneficiary(ies) may be changed at any time. If the beneficiary(ies) dies within the five-year period and the Participant dies without naming a new beneficiary(ies), any amount payable will be paid to the Participant’s estate.
8. Ten Year Certain: This option provides the Participant with a reduced lifetime benefit and the additional guarantee that, if he/she lives for less than ten years after retirement, payments in the same amount he/she was receiving (without COLA) will be made to the beneficiary(ies) for the balance of the ten-year period. If the Participant lives more than ten years after retirement, he/she will continue to receive payments for his/her lifetime, but no payments will be made to any beneficiary(ies) or estate when the Participant dies. The beneficiary(ies) may be changed at any time. If the beneficiary(ies) dies within the ten-year period and the Participant dies without naming a new beneficiary(ies), any amount payable will be paid to the Participant’s estate.
f. Option Cost:
Choose one:
1. The cost of Participant’s retirement option will be shared proportionately by the parties.
2. The cost of Participant’s retirement option will be borne solely by the Alternate Payee.
3. The cost of Participant’s retirement option will be borne solely the Participant.
4. The cost of Participant’s retirement option will be shared equally by the parties.
g. Pop up Feature:
Choose one:
1. In addition to the retirement option election, the Participant may also elect to “pop-up” the benefit payment to a Single Life Allowance should the Alternate Payee predecease the Participant.
2. In addition to the retirement option election, the Participant may NOTelect to “pop-up” the benefit payment to a Single Life Allowance should the Alternate Payee predecease the Participant.
h. Pop up Feature Option Cost:
Choose one:
1. Participant pays.
2. Alternate Payee pays.
3. Shared proportionately.
4. Shared equally.
i. Pre-retirement Ordinary Death Benefit:
Choose one:
1. Alternate Payee is entitled to a pro-rata share (based on the formula above) of any Ordinary Death benefit that may become payable if the Participant's death occurs prior to retirement.
2. Alternate Payee is not entitled to a portion of this benefit.
3. Alternate Payee is entitled to a specific percentage:
j. Loans:
Choose one:
1. Participant may take loans, but Alternate Payee's share will not be reduced if there are outstanding loans at retirement.
2. Participant may take loans, but Alternate Payee's share will be proportionately reduced if there are outstanding loans at retirement.
3. Participant may not take loans.
4. Participant may not take further loans, and the Alternate Payee's share will not be reduced if there are outstanding loans at retirement.
k. Return of Contributions or Withdrawal of Membership
Choose one:
1. If Participant receives a return of any contributions the Alternate Payee is entitled to a pro-rata share based on the formula above.
2. If Participant receives a return of any contributions the Alternate Payee is not entitled to a portion of the contributions.
l. QDRO Preparation: The [Wife / Husband] shall retain Steven L. Abel of AbelsQDROs to prepare a domestic relations order (“DRO”) that is consistent with this Agreement. The parties agree to fully cooperate and provide any plan documents or authorization necessary to complete the DRO process.
m. Continued Jurisdiction: The court shall retain jurisdiction to amend the provisions of this Agreement, to amend the QDRO, and to issue new orders to enforce the parties’ intent regarding the Participant’s Plan benefits that are assigned to the Alternate Payee.
n. Participant’s Actions: The Participant shall not act, or refuse to act, in any manner that could diminish the Alternate Payee’s right to the Plan benefits assigned in this Agreement and in the related QDRO. If the Participant does take such action or inaction, the Participant shall make payments directly to the Alternate Payee to the extent necessary to restore the Alternate Payee to the position he/she would otherwise have been in without the Participant’s action/inaction.
o. Other Plans: The parties each represent that they have an interest in the following additional retirement plans:
HUSBAND'S / WIFE’S PLANS:
[list names of other plans here]
WIFE’S / HUSBAND'S PLANS
[list names of other plans here]
p. The parties represent that they do not have an interest in any plans not mentioned in paragraphs a to o above.
q. Except as provided in paragraphs a to n above, the parties waive any interest they may have in any retirement plan in the name of the other party, listed in paragraph o above, as further provided in this paragraph q.
The parties shall execute any spousal waivers that may be required under the Retirement Equity Act of 1984 or any existing or similar federal or state statute that may be enacted. This paragraph is intended to substitute for any other statement, prepared form or document which might be required by any plan, fund, trust, administrator, trustee or similar entity or person, so that each party may receive said benefits as if the parties never married.
Each party (as "Releasee") hereby elects, and the other party (as "Releasor") hereby consents to, a waiver and release of any and all benefits, including, without limitation, the qualified joint and survivor annuity benefit form of benefit under all pension, retirement, death benefit, stock bonus or profit-sharing plans, systems or trusts (hereinafter collectively called "employee plans") of which the Releasor is, or may become, a participant, beneficiary or member. This waiver and release is meant, without limitation, as a waiver pursuant to Internal Revenue Code Section 417(a). If requested, the Releasor shall consent in writing, in any form requested by the Releasee, to any such election. The spousal consent of the Releasor set forth herein is irrevocable. Each party acknowledges that he/she has received an explanation of a qualified pre-retirement survivor annuity in accordance with Internal Revenue Code Section 417(a)(3)(b) and that the effect of this consent is to deny Releasor any right, interest or annuity in, to, or from the Releasee's benefits under any employee benefit plan, now or in the future.
The Releasor acknowledges and hereby consents to the Releasee's election that upon Releasee's death, all death benefits under any employee plan of the Releasee will be paid to such person as Releasee may have designated at any time before the execution of this Agreement or may designate from time to time hereafter, in Releasee's sole and unfettered discretion.
If the Releasor shall receive any part of or benefits from the Releasee's account or accrued benefit in any employee plan, other than pursuant to a beneficiary designation executed after the date hereof by the Releasee which designation expressly names the Releasor as a beneficiary, Releasor shall promptly turn same over to the Releasee (or if the Releasee if not then living, to his/her designated beneficiaries under said employee plan, if any, or if there is no designated beneficiary, to the Releasee's estate).
The parties intend that this Agreement be accepted as a spousal consent by each of them as Releasee to a waiver of a qualified pre-retirement survivor annuity pursuant to Internal Revenue Code Section 417(a).
r. Nothing herein shall be deemed to waive either party's Social Security rights.