Montana Code 19-2-907. Alternate payees — family law orders — rulemaking
19-2-907. Alternate payees — family law orders — rulemaking. (1) A participant in a retirement system may have the participant’s rights modified or recognized by a family law order.
Terms Used In Montana Code 19-2-907
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Process: means a writ or summons issued in the course of judicial proceedings. See Montana Code 1-1-202
- Property: means real and personal property. See Montana Code 1-1-205
(2)For purposes of this section:
(a)”family law order” means a judgment, decree, or order of a court of competent jurisdiction under Title 40 concerning child support, parental support, spousal maintenance, or marital property rights that includes a transfer of all or a portion of a participant’s payment rights in a retirement system to an alternate payee in compliance with this section and with section 414(p) of the Internal Revenue Code, 26 U.S.C. § 414(p); and
(b)”participant” means an identified person who is a member or an actual or potential beneficiary, survivor, or contingent annuitant of a retirement system or plan designated pursuant to Title 19, chapter 3, 5, 6, 7, 8, 9, 13, or 17.
(3)A family law order must identify a participant and an alternate payee by full name, current address, date of birth, and social security number. An alternate payee’s rights and interests granted in compliance with this section are not subject to assignment, execution, garnishment, attachment, or other process. An alternate payee’s rights or interests may be modified only by a family law order amending the family law order that established the right or interest.
(4)Except as provided in subsection (6)(a), a family law order may not require:
(a)a type or form of benefit, option, or payment not available to the affected participant under the appropriate retirement system or plan; or
(b)an amount or duration of payment greater than that available to a participant under the appropriate retirement system or plan.
(5)With respect to a defined benefit plan, a family law order may provide for payment to an alternate payee only as follows:
(a)Retirement benefit payments or refunds may be apportioned by directing payment of either a percentage of the amount payable or a fixed amount of no more than the amount payable to the participant. Payments to an alternate payee may be limited to a specific amount each month if the number of payments is specified.
(b)The maximum amount of disability or survivorship benefits that may be paid to alternate payees is the monthly benefit amount that would have been payable on the date of termination of service if the member had retired without disability or death. The maximum amount paid may be zero, depending on the member’s age and service credit at the time of disability or death. Conversion of a disability retirement to a service retirement pursuant to 19-2-406(5), 19-3-1015(2), 19-6-612(2), or 19-8-712(2) does not increase the maximum monthly amount that may be paid to an alternate payee.
(c)Retirement benefit adjustments for which a participant is eligible after retirement may be paid as a percentage only if existing benefit payments are paid as a percentage. The adjustments must be paid as a percentage in the same ratio as existing benefit payments unless the family law order specifies that the alternate payee is not entitled to benefit adjustments.
(d)The participant may be required to choose a specified form of benefit payment or designate a beneficiary or contingent annuitant if the retirement system or plan allows for that option.
(6)With respect to a defined contribution plan, a family law order may provide for payment to an alternate payee only as follows:
(a)The vested account of the participant may be apportioned by directing payment of either a percentage or a fixed amount. The total amount paid may not exceed the amount in the participant’s vested account. The alternate payee may receive the payment only as a direct payment, rollover, or transfer. The alternate payee’s portion must be totally disbursed to the alternate payee as soon as administratively feasible upon the board’s approval of the family law order.
(b)If the participant is receiving periodic payments or an annuity provided under the plan, those payments may be apportioned as a percentage of the amount payable to the participant. Payments to the alternate payee may be limited to a specific amount each month if the number of payments is specified. Payments may not total more than the amount payable to the payee.
(7)The duration of monthly payments paid from a defined benefit or defined contribution plan participant to an alternate payee may not exceed the lifetime of the appropriate participant. The duration of the monthly payments may be further limited only to a specified maximum time, the life of the alternate payee, or the life of another specified participant. Unless a family law order specifies the alternate payee’s rights and interests revert to the participant upon the alternate payee’s death, the alternate payee’s rights and interests survive the alternate payee’s death and may be transferred by inheritance or by designation of a beneficiary.
(8)The board may assess a participant or an alternate payee for all costs of reviewing and administering a family law order, including reasonable attorney fees. The board may adopt rules to implement this section.
(9)Each family law order establishing a final obligation concerning payments by the retirement system must contain a statement that the order is subject to review and approval by the board.
(10)The board shall adopt rules to provide for the administration of family law orders.