SAMPLE “DRO” LANGUAGE FOR DIVORCE JUDGMENTS
[THIS SECTION IS INTENDED PRIMARILY FOR ATTORNEYS, BUT OF COURSE IS AVAILABLE TO ANYONE INTERESTED, AND MAY PROVIDE A USEFUL GUIDE FOR A PARTY IN REVIEWING HIS OR HER OWN PROPOSED JUDGEMENT. AS REPRINTED BELOW, PER MICHIGAN STATUTE MCL 552.101(4), RIGHTS TO RETIREMENT BENEFITS MUST BE ADDRESSED IN A JUDGMENT OF DIVORCE OR SEPARATE MAINTENANCE (LEGAL SEPARATION)].
Michigan Statute MCL 552.101(4) provides:
Each judgment of divorce or judgment of separate maintenance shall determine all rights, including any contingent rights, of the husband and wife in and to all of the following:
(a) Any vested pension, annuity, or retirement benefits.
(b) Any accumulated contributions in any pension, annuity, or retirement system.
(c) In accordance with section 18 of 1846 RS 84, MCL 552.18, any unvested pension, annuity, or retirement benefits.
(5) For any divorce or separate maintenance action filed on or after September 1, 2006, if a judgment of divorce or judgment of separate maintenance provides for the assignment of any rights in and to any pension, annuity, or retirement benefits, a proportionate share of all components of the pension, annuity, or retirement benefits shall be included in the assignment unless the judgment of divorce or judgment of separate maintenance expressly excludes 1 or more components. Components include, but are not limited to, supplements, subsidies, early retirement benefits, postretirement benefit increases, surviving spouse benefits, and death benefits. This subsection shall apply regardless of the characterization of the pension, annuity, or retirement benefit as regular retirement, early retirement, disability retirement, death benefit, or any other characterization or classification, unless the judgment of divorce or judgment of separate maintenance expressly excludes a particular characterization or classification.
The following provides some common elements of retirement plan division to consider.
(Does not address the actual division of the Plan, which of course must be determined on a case by case basis, e.g., to use coverture fraction or if using more simple date(s) of division will adequately protect the parties, etc.).
IT IS HEREBY ORDERED AND ADJUDGED that each party's employment pension or other defined benefit plans, defined contribution plans, deferred compensation plans, or other retirement benefits or accounts, as accumulated during the course of the parties' marriage, shall be divided equally (or other) between the parties, per Domestic Relations Orders and/or other documents (Judgments, other Court Orders, Letters of Instruction/Acceptance, Plan internal forms, etc., as indicated by the retirement plan), to be filed with the Court, and/or otherwise prepared and filed with the appropriate plan. [It is advisable to specifically identify the plans to be divided, by name (e.g., specific name of pension; 401K through X employer), partial contract or account number (ex.- xxxx123), currently held with Y investment fund, etc.]
(Set forth division amount/method)
IT IS HEREBY ORDERED that the amount assigned to Plaintiff/Defendant (specify) shall be/shall not be (specify) adjusted for investment income (interest and dividends), gains and losses from the plan division date of ______ through the date the Plaintiff’s/Defendant’s (specify) share of the plan funds are segregated in her/his name and thereafter if applicable. (defined contribution plans only)
IT IS HEREBY ORDERED that any loans outstanding from the plan shall/shall not (specify) be included in the plan balance to be divided. (defined contribution plans only)
IT IS HEREBY ORDERED that Plaintiff and Defendant receive the same or as practically as possible the same benefit components pursuant to the DRO or other Court Order to be entered, to the extent permitted by the Plan or Fund to be divided, such as but not limited to, pre-retirement and post-retirement increases, temporary increases, interim supplements and COLA increases, in proportion to his/her share of the benefits, as set forth in MCL 552.101 and otherwise. (generally, defined benefit (pension) plans only)
IT IS HEREBY ORDERED that Plaintiff/Defendant (specify) is specifically awarded the right to be designated, and is to be designated, as the pre-retirement and/or post-retirement surviving spouse for the full/marital share (specify) of surviving spouse benefits under the Plan and per the Court Order to be entered. (generally, defined benefit (pension) plans only)
IT IS HEREBY ORDERED that Plaintiff/Defendant (specify) shall have the right per the Court Order to be entered, and to the extent permitted by the Plan or Fund to be divided, to choose a benefit payment based on his/her (specify) own lifetime,* the option to receive benefits when the Plan or Fund Participant reaches earliest retirement age*, regardless of actually retiring, and to choose any other benefit payment option available under the Plan or Fund, providing it does not adversely affect the Participant’s residual share. (generally, defined benefit (pension) plans only)
*not available under federal or military pensions
IT IS HEREBY ORDERED that Plaintiff/Defendant (specify) shall be entitled, to the extent permitted by the Plan, to designate a beneficiary on his/her (specify) share of the Plan benefits in the event of his/her (specify) death.
IT IS HEREBY ORDERED that Plaintiff/Defendant (specify)is not entitled to any refund of employee contributions from the Plan, unless both parties agree to such refund, and in that event, Plaintiff/Defendant (specify) shall be entitled to a refund as well, in proportion to his/her (specify) share of the Plan as set forth above. (generally, defined benefit (pension) plans only)
IT IS HEREBY ORDERED that the cost of preparing the Court Order(s) dividing the retirement plan(s) as specified herein shall be paid by _____, (or) shall be paid shared equally by both parties.
IT IS HEREBY ORDERED that should the retirement Plan(s) charge any administrative or other costs for implementing the terms of the Order dividing the Plan, Plaintiff and Defendant shall share such costs equally.
[Consider per 2006 statutory amendment MCL 552.101 (5)]:
IT IS HEREBY ORDERED that this (or foregoing) section applies only to the regular retirement portion of any pensions/defined benefit plans, and not to any disability portion of a pension, or disability pension, which are excluded from this section. [Consider referring to any other plans or plan components to be excluded; e.g., early retirement subsidy(ies)]