April 30, 2016
On July 1, 2015, the General Assembly enacted new legislation that addressed the division of public employee pension plans during the course of divorce proceedings. Section 26-2-105(d)(1) of the Tenn. Code Ann. now provides that “a local government that establishes and maintains for its employees a qualified plan, and the qualified plan’s administrator, shall honor claims under a qualified domestic relations order, if the order relates only to the provision of marital property rights for the benefit of the former spouse of the qualified plan’s participant”. This is a significant change in the area of public employee law and domestic relations as, prior to this amendment, public employee pension plans did not create “separate interests” for the divorcing spouse who was not the employee.
A brief digression into Qualified Domestic Relations Orders (QDRO) is necessary to understand this alteration to the law. A QDRO, for the non-family law practitioner, is an order from the court “which creates or recognizes the existence of an alternate payee’s right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a plan.” Section 26-2-105 deals with QDROs as they apply to all pensions plans, both public and private, and discusses the applicability of QDROs to a division of these pension plans.
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