Pension QDRO Blues - Butler v. Butler

In mid-January, 2015, the North Carolina Court of Appeals issued its ruling in the case of Butler v. Butler. Appellate cases are important because they set guidelines on how courts rule in the future. It is what lawyers and judges refer to as precedent.


Wife believed her lawyer submitted the pension QDRO to the plan but discovered years later, after Husband had been receiving benefits for two years, that the plan had no record of the QDRO. Wife sued Husband for breach of contract and won in the trial court but the NC COA overturned because it was Wife’s obligation to ensure that the QDRO was submitted to the plan. The court’s ruling held that the Husband (the pension participant) did not breach the parties’ settlement agreement when he retired and began receiving full pension benefits. Accordingly, Wife was not entitled to recover her share of the pension benefits paid to Husband prior to Wife’s discovery that the QDRO had not been submitted to the plan.

At Tharrington Smith, our Board Certified Specialists in Family Law have significant legal expertise in the area of Qualified Domestic Relations Orders and the special requirements for them at both the state and federal level. Each appellate case teaches lawyers new things. Our team ensures that:

  • Language is included in the settlement that obligates Participant to notify Alternate Payee that benefits are going into pay status (i.e., the participant is about to retire);
  • Language is included in the settlement that specifically authorizes Alternate Payee to seek reimbursement from Participant if Alternate Payee’s share of the benefits are inadvertently paid by the plan to Participant;
  • We scan and retain a copy of all documents submitted to the Plan for qualification of a retirement order; and
  • We calendar to follow up on qualification of the final QDRO and remind you to do the same

If you believe your Qualified Domestic Relations Order needs review, contact the legal specialists at Tharrington Smith for a review of your divorce settlement.