Recent Pension Buyout Offers From Ford And GM May Impact Spouses Benefits
Both Ford and General Motors have announced pension buyout offers for salaried retirees. If you are the former spouse of a Ford or GM salaried employee that is retired and you were awarded a portion of that person’s pension benefits, your benefits may also be impacted.
Ford Motor Company
Ford is offering a lump sum payment option to all current salaried retirees. The effect of the buyout offer is that if it is elected, there will be no further benefit payments made. If you are the former spouse of a current Ford salaried retiree that was awarded a portion of the pension benefits in your judgment of divorce or judgment of separate maintenance, and a Qualified Domestic Relations Order (“QDRO”) has either not been prepared allocating to you those benefits, or has been prepared, but not accepted and qualified by Ford, then you risk losing payment of those benefits should the salaried retiree elect the lump sum payment. In addition, if you were awarded surviving spouse benefits, you again risk losing those benefits if the salaried retiree elects the lump sum payment. Ford has yet to publish any official information on how the lump sum payment would effect benefits awarded to former spouses, including surviving spouse benefits. However, it is believed that as long as QDRO is in place, or if the parties were still married at the time of retirement, then the salaried retiree would probably require your consent in order to elect the lump sum payment option.
General Motors
GM is offering a lump sum payment option to salaried retirees who retired between October 1, 1997 and December 1, 2011. The same concerns regarding the effect of the salaried retiree electing the lump sum payment option as set forth above regarding Ford, exist here with GM’s offer. For all remaining salaried retirees, including those that did not elect the lump sum payment, and presumably any former spouse that was awarded a portion of that retiree’s pension benefits, GM will be purchasing annuity contracts through Prudential Insurance Company to replace the pension benefits. In other words, Prudential will be paying out the benefits. It is not clear at this time, if the annuity contracts are divisible by a QDRO. Therefore, if you are currently involved in a divorce where you have an expectation of being awarded a portion of pension benefits from a GM salaried employee, or you have already been awarded a portion of those benefits pursuant to a judgment of divorce, but a QDRO has either not been prepared, or has not been accepted by GM, this may effect your benefits.
If either of the above listed scenarios impact you, or you suspect that they might impact you, please feel free to contact us via e-mail, telephone or schedule an appointment to discuss your matter in greater detail.