Qualified Domestic Relations Orders and Pension Evaluations
Pension Evaluations Qualified Domestic Relations Orders QDRO's QDRO Tutorial Pension Evaluation Contact Us

Name:
Email:
Phone:
--
Message:
Make a Payment
We support Apraxia-KIDS

N.Y.P.D.
VARIABLE SUPPLEMENT FUND
DOMESTIC RELATIONS ORDERS
IMPACT OF PAGLIARO

The Court of Appeals in DeLuca; 736 N.Y.S.2d 651, established that the Variable Supplement Fund (VSF) is marital property divisible upon divorce. The following issue was not addressed in the DeLuca decision:

For an Alternate Payee to receive all or a portion of the marital part of the VSF, is it required that specific language appear in the divorce decree awarding an Alternate Payee his or her interest in this pension benefit?

Absent such clear assignment language in the divorce instrument does an Alternate Payee lose his or her entitlement to the VSF? The answer is found at Pagliaro; 821 N.Y.S.2d 602. The Pagliaro court opined as follows:

…It was not necessary for the Agreement to specifically provide for the plaintiff to receive an equitable share of the VSF benefits…, they were merely supplements to the existing pension asset…

Based on the DeLuca and Pagliaro decisions the practitioner will now observe that

Absent language in the decree of divorce to the contrary an Alternate Payee has an enforceable right to a portion of the marital part of the VSF.

The absence of specific language in the divorce decree regarding an assignment of the VSF portion of the pension to a Former Spouse is not a bar to his or her entitlement to this asset.

Caveat:
Our concern is that practitioners representing the titled-spouse and who are unfamiliar with Pagliaro may assume that the omission of language in a decree of divorce regarding the VSF portion of the pension is an effective tool to bar an Alternate Payee's entitlement to the VSF pension benefit.

Suggested Procedure:
In a manner consistent with the intent of the parties, specifically, recognize the relative rights of the spouses in both the traditional pension and the VSF.
To the extent the parties have agreed to a division of the pension, the VSF should be similarly divided. Absent from the language relevant to the assignment of VSF benefits will be survivor benefits since all payments end upon the death of the retiree.