When a TRS member and his or her spouse divorce, the member's current or future benefits are considered marital property subject to division by the divorce decree. In many cases, the value of the retirement benefit is considered part of the total assets of the marriage, but the member's spouse may receive other property of equal value in the divorce settlement in lieu of any right to receive a portion of the TRS member's retirement benefits.
Qualified Domestic Order
In the event your retirement benefit is to be divided between you and your ex- spouse, the divorce decree should stipulate such and the parties must complete a Qualified Domestic Order. The QDO must be signed by the court and filed with TRS. For TRS to approve a QDO, the agreement must meet all provisions of state statutes and comply with the requirements outlined below. The QDO form must be completed, signed by all parties, including the district court judge, and must not be altered in any material aspect.
TRS is not Subject to ERISA
TRS is a state-run government pension plan and operates under statutory provisions found at 70 O.S. § 17-101 et seq. TRS is a qualified pension plan under the provisions of Section 401 (a) of the Internal Revenue Code, but is exempt from the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. Section 1001, et seq. Oklahoma statutes governing the division of a TRS member's benefits in the event of divorce is found at 70 O.S. § 17-109.
Only Two Distribution Options are Available
TRS is a defined benefit plan and, therefore, operates differently than many defined contribution plans found in the private sector. Distributions to members are limited to two options. You may elect to receive a lump sum cash payment four months after termination of employment or a monthly retirement benefit for life after meeting certain age and service requirements. Eligibility for monthly benefits includes a minimum of 5 years of contributing service in Oklahoma public schools. If you haven't or do not complete at least 5 years of service, the only distribution available to you or your beneficiaries is a lump sum payment of deposits plus applicable interest.
No Distribution can be Made until You are Eligible
No distribution can be made from your account until you qualify for and elect a distribution [70 O.S. § 17-109(B)(7)], and the distribution to an alternate payee must be of the same type you receive. [70 O.S. § 17-109(B)(6)(a)]. This means TRS cannot and will not make a lump sum payment from your account to an alternate payee unless and until you are eligible for and elect to receive a lump sum distribution of your total retirement account balance. If you elect to receive monthly retirement benefits, the alternate payee will be entitled to a portion of these monthly payments for the rest of your life or an agreed-to set number of months. Payments to the alternate payee cannot begin before payments commence to you, and TRS cannot and will not guarantee a certain amount will be paid to the alternate payee. Monthly payments stop at the time of your death and TRS has no further obligation to the alternate payee following your death.
TRS Provides Information to Both Parties
Upon request, TRS will furnish data showing the account balance and accumulated interest and/or an estimation of the monthly benefit due to you at a future date. This information may be requested by you or the alternate payee. Information provided to the alternate payee or his or her representatives will always also be provided to you.
Present Value of Your Account
The value of your account can be stated as a present dollar value, meaning the current dollar amount necessary to purchase a monthly benefit at some future date. If a present value calculation is made by TRS, it will be based on instructions from TRS' consulting actuary, using interest rate assumptions and morality tables adopted by the Board. TRS will not make additional calculations based on assumptions provided by you or the alternate payee. Remember that neither you nor the alternate payee are entitled to receive the present dollar value of the account. This amount is an actuarial value assuming you retire at a certain age and receive monthly benefits throughout your lifetime.
TRS Statement Acceptable Evidence in Court
TRS is an agency of the state of Oklahoma. See 70 O.S. 2001, § 17-102. Pursuant to the Oklahoma Evidence Code, Hearsay Exceptions, 12 O.S. 2001, § 2803(8), a Summary of Retirement Benefits from TRS can be used in district court without the need for personal appearance by TRS staff.
TRS Legal Representative
TRS is represented by the Office of Attorney General, State of Oklahoma. If you have questions regarding the calculation of benefits please contact the TRS at 1-877-738-6365 or 405-521-2387. If you have questions concerning the law as it applies to qualified domestic orders, please contact Mr. David Kinney, Assistant Attorney General, at the number above. (Fax 405-522-0633).
