AT WRPA CP - Michigan 7 2023 CPSW

No Solvency - Inequality
CP insufficient to solve all inequality---80% of Americans are struggling, but the CP only improves retirement benefits for women.
NCOA 23, 4/10/2023, The National Council on Aging, https://ncoa.org/article/addressing-the-nations-retirement-crisis-the-80-percent-financially-struggling, HKeef
Today’s 65-year-old can expect to live another 20 years, according to the Social Security Administration. This unprecedented gift of longevity brings with it exciting opportunities—and a price tag. Unlike their parents and grandparents, today’s pre-retirees and retirees face a vastly different retirement security landscape. The traditional three pillars of retirement income are changing.
NCOA worked with the LeadingAge LTSS Center @ UMass Boston to examine both the challenge and potential solutions.
U.S. Wealth Gap Widening: 47 Million Older American Households Facing Financial Risks
Our 2023 updated analysis revealed that most older Americans continue to lack the resources that would allow them to weather a "financial shock" such as a significant long-term care need, health issue, or loss of income due to divorce or widowhood. The analysis of 2018 data previously found that 80%—or 47 million households with older adults—are financially struggling today or are at risk of falling into economic insecurity as they age.
The updated analysis found that despite older adults' preference to age in place, 60% would be unable to afford two years of in-home long-term services and supports. And 45% of people 60 and older had household incomes below the Elder Index value for their geography. In other words, their average income was below what they needed to afford basic living needs.
The True Scope of Financial Insecurity in Retirement
To better understand the financial landscape of older Americans, researchers at NCOA and the LeadingAge LTSS Center @UMass Boston analyzed the latest data from the Health and Retirement Study, a longitudinal panel study that surveys a representative sample of approximately 20,000 people in America, supported by the National Institute on Aging and Social Security Administration.
The analysis discovered that 80% of households with older adults—or 47 million—are financially struggling today or are at risk of falling into economic insecurity as they age. Moreover, this trend is worsening over time, as 90% of older households experienced decreases in income and net value of wealth between 2014 and 2016.
Four Ways to Help Retirees Make Their Money Last
Combined together, longer lives and lower savings are fueling a retirement security crisis for millions of Americans. It is exacerbated by inflation, rising health care costs, and the fact that someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their lifetime. Long-term care is expensive and not covered by Medicare.
This white paper by NCOA, LeadingAge LTSS Center @UMass Boston, and Nationwide offers four ways to help retirees make their money last in retirement.
SS key to solve retirement crisis and inequality.
Nancy J. Altman 14, President of Social Security Works and Chair of the Strengthen Social Security Coalition, “America’s Retirement Security Crisis Is Huge and Quickly Approaching,” December 24, 2014. https://www.alternet.org/2014/12/americas-retirement-security-crisis-huge-and-quickly-approaching, HKeef
YOU’VE HEARD ABOUT BOOMERANG KIDS—ADULT CHILDREN in their 20s and 30s who have returned to live in their parents’ homes. Well, get ready for boomerang parents, formerly independent middle-aged people who—ten, fifteen, twenty years hence—will have no choice but to move into their adult children’s homes because they cannot afford to maintain their own.
While politicians and journalists have been distracted for years by a faux crisis in Social Security, a very real crisis has gathered momentum and threatens to undermine the plans and hopes for a secure retirement of tens of millions of today’s workers.
Congressional champions are beginning to sound the alarm. Retired senator Tom Harkin (D-IA) warns that the “retirement crisis is worse than most people realize. . . . [The] difference between what people have saved for retirement and what they should have at this point—is a staggering $6.6 trillion, and half of Americans have less than $10,000 in savings.”1
“Add up . . . the dramatic decline in individual savings and the dramatic decline of guaranteed retirement benefits and employer support,” explains senator Elizabeth Warren (D-MA), “and we’re left with a retirement crisis—a crisis that is as real and as frightening as any policy problem facing the United States today.”2 And President Obama has weighed in, explaining, in his 2014 State of the Union address, that, “Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own.”3
But Washington is just catching up to what too many Americans have already discovered the hard way—that the American Dream of maintaining one’s standard of living in retirement after a lifetime of work—never a reality for millions of workers—is endangered for nearly all but the wealthiest among us.
Testifying before the United States Senate Special Committee on Aging, Joanne Femino Jacobsen, age 63, talked about why she cannot ever see herself retiring, even though she has worked her entire life—eighteen years with AT&T while earning a college degree at night, twelve years with Verizon until being laid off at age 52, and then learning a new trade leading to positions in real estate appraisal, sales, and training, and as a town tax assessor.4
But it’s not just workers in their early 60s who are worried. Currently a temporary worker, Karen O’Quinn, age 46, explains: “I worked for corporate America for many years and after being laid off, I had to re-create myself. I ,like millions of people in this country, have no retirement and no savings for retirement. I do not know how I am going to make it.”5
Small business owner Brian Edwards, age 39, says, “I have a 401(k), but now that I am self-employed nothing else is getting put into it. It is basically sitting there.”6
Childbirth educator Alana Rose, age 29, explains that at “this time, I am not able to save for retirement. My business is not profitable enough to pay all my bills and save for retirement.” David Muse, a 53-year-old audio technician, warns, “You work until you either fall apart, your health totally crumbles, or you die.” And C. William Jones, a retired executive, age 79, worries that his “kids and grandchildren are really going to have a difficult time, because as of right now, I don’t know what kind of pension they can depend upon.”7
These are but a few examples of Americans caught in the cross-hairs of the nation’s emerging retirement income crisis. As we explain in this chapter, the crisis is most acute for those in their mid-40s, 50s, and early 60s—those nearing retirement age—whose prospects for a secure retirement have been greatly diminished by already enacted cuts to Social Security, the declining availability of occupational pensions, the inadequacy of 401(k)s and other retirement savings vehicles, the loss of savings as the result of the Great Recession, and the stagnation of wages. And, depending on how things play out, the crisis is likely to affect those just entering the workforce as much as, or even more than, today’s older workers.
THE RISE AND FALL OF RETIREMENT SECURITY
Before Social Security, growing old was widely feared. In 1912, Lee Welling Squier, a pension expert, described this fear:
After the age of sixty has been reached, the transition from non-dependence to dependence is an easy stage—property gone, friends passed away or removed, relatives become few, ambition collapsed, only a few short years left to live, with death a final and welcome end to it all—such conclusions inevitably sweep the wage-earners from the class of hopeful independent citizens into that of the helpless poor.8
The fifty years following the enactment of the Social Security Act of 1935 ushered in what some, a bit too effusively, called the golden age of retirement in America. Rising wages, improving standards of living, Social Security, Medicare, Medicaid, home ownership, senior housing, congregate meals, Meals on Wheels, other federally funded social services, and employer-sponsored pensions meant that most Americans could count on at least a modicum of economic security in old age, leaving them free to choose to continue or discontinue work, pursue new interests, recreate, give to family and community, and live with their children or by themselves. Not that aging in America was without problems. Yet from 1935 until near the end of the century, things appeared to be moving in the right direction.
Although not a reality for everyone, the promise of the 1950s and 1960s was that Social Security would provide a secure foundation upon which workers could build a secure retirement from a combination of Social Security, employer-provided pensions, and personal savings. Those workers could look forward to the possibility of a period of leisure after a life of hard work.
Unfortunately, fewer and fewer workers today feel confident in that ability. While no one thinks that a return to poorhouses and the mass insecurity in old age that preceded Social Security is around the corner, working-age Americans are increasingly worried about their ability to maintain their standards of living in retirement. Allianz Life Insurance Company reported, from its 2010 survey of 3,257 people, that “an overwhelming 92%” answered that they absolutely (44%) or somewhat (48%) believe that the nation faces a retirement income crisis, with “more than half (54%)” of persons ages 44 to 49 saying they are “totally unprepared” for retirement.9 In its 2013 retirement confidence survey of 1,003 workers, the Employee Benefit Research Institute (EBRI) found that only “13 percent are very confident they will have enough money to live comfortably in retirement,” the lowest ever reported in the twenty-three years of conducting this annual survey.10
During the so-called golden age of retirement, a metaphor for secure retirement income became popular: a three-legged stool, with the three legs representing Social Security, employer-provided pensions, and savings. Coined in 1949 by a prominent actuary who worked for the Metropolitan Life Insurance Company,11 the stool was a useful image for those promoting private pensions. But it was never accurate, because the legs were never equal. Even for the half of the workforce fortunate to have employer-provided pensions, Social Security was generally the most important and secure source of retirement income. A more apt picture of the patchwork of retirement income would have been a pyramid, as in figure 4.1.
But recent events and trends render even the more accurate pyramid image irrelevant. Indeed, Peter Brady, an economist with the Investment Company Institute, suggests that “instead of a stool” most Americans “have a pogo stick: Social Security” to negotiate their retirement years—which goes a long way in explaining why working Americans are increasingly fearful.12 Although Social Security is much more stable than a pogo stick, the three-decade-long, billionaire-funded campaign to undermine confidence in the program may make the receipt of benefits feel less secure than it is. Moreover, though vital, the benefits by themselves are very modest.
No Solvency - Too complicated
CP fails---obtaining QDROs are complicated and take years.
Department of Labor 20, 7/19/2020; date acquired from https://www.msmqdros.com/qdro-fact-sheet/, U.S. Department of Labor’s Employee Benefits Security Administration, https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/qdro-overview.pdf, HKeef
Are there other requirements that a domestic relations order must meet to be a QDRO?
Yes. There are certain provisions that a QDRO must not contain:
• The order must not require a plan to provide an alternate payee or participant with any type or form of benefit, or any option, not otherwise provided under the plan
• The order must not require a plan to provide for increased benefits (determined on the basis of actuarial value)
• The order must not require a plan to pay benefits to an alternate payee that are required to be paid to another alternate payee under another order previously determined to be a QDRO
• The order must not require a plan to pay benefits to an alternate payee in the form of a qualified joint and survivor annuity for the lives of the alternate payee and his or her subsequent spouse
…
Who determines whether an order is a QDRO?
Under Federal law, the administrator of the retirement plan that provides the benefits affected by an order is the individual (or entity) initially responsible for determining whether a domestic relations order is a QDRO. Plan administrators have specific responsibilities and duties with respect to determining whether a domestic relations order is a QDRO. Plan administrators, as plan fiduciaries, are required to discharge their duties prudently and solely in the interest of plan participants and beneficiaries. Among other things, plans must establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions pursuant to qualified orders. Administrators are required to follow the plan's procedures for making QDRO determinations. Administrators also are required to furnish notice to participants and alternate payees of the receipt of a domestic relations order and to furnish a copy of the plan's procedures for determining the qualified status of such orders.
It is the view of the Department of Labor that a state court (or other state agency or instrumentality with the authority to issue domestic relations orders) does not have jurisdiction to determine whether an issued domestic relations order constitutes a “qualified domestic relations order.” In the view of the Department, jurisdiction to challenge a plan administrator's decision about the qualified status of an order lies exclusively in Federal court.
Reference: ERISA §§ 206(d)(3)(G)(i) and (ii), 404(a), 502(a)(3), 502(e), 514; IRC § 414(p)(6)(A)(ii)
Who is the “administrator” of the plan?
The “administrator” of an employee benefit plan is the individual or entity specifically designated in the plan documents as the administrator. If the plan documents do not designate an administrator, the administrator is the employer maintaining the plan, or, in the case of a plan maintained by more than one employer, the association, committee, joint board of trustees, or similar group representing the parties maintaining the plan. The name, address, and phone number of the plan administrator is required to be included in the plan's summary plan description. The summary plan description is a document that the administrator is required to furnish to each participant and to each beneficiary receiving benefits. It summarizes the rights and benefits of participants and beneficiaries and the obligations of the plan. Reference: ERISA §§ 3(16), 102(b), 29 CFR § 2520.102-3(f); IRC § 414(g), Treas. Reg. § 1.414(g)-1 Will the Department of Labor issue advisory opinions on whether a domestic relations order is a QDRO?
No. A determination of whether an order is a QDRO necessarily requires an interpretation of the specific provisions of the plan or plans to which the order applies and the application of those provisions to specific facts, including a determination of the participant's actual retirement benefits under the plan(s). The Department will not issue opinions on such inherently factual matters.
Reference: ERISA Procedure 76-1, 41 Fed. Reg. 36281 (1976)
CP fails---the QDRO process is long and complicated with many loopholes.
Jarrod Hays 22, Founder of Skyview Law, “How Long Does It Take To Receive Funds From a QDRO,” May 11, 2022. https://skyviewlaw.com/blog/how-long-does-it-take-to-receive-funds-from-a-qdro/, HKeef
How Long Does It Take to Receive Funds From QDRO
The time it takes to receive funds from a QDRO (qualified domestic relations order) can vary widely based on several factors. You can typically expect the entire process to take between six and eight months, but it can be as fast as two months or take as long as two years or more.
If your divorce lawyer has done most of the steps necessary to draft your QDRO the process will likely take three months at the most. If your divorce is final and you have an agreement with detailed and well-crafted language, your QDRO process should be relatively quick.
Once the QDRO process is complete, you will have access to your portion of the QDRO funds within a few weeks. In some cases, you may be able to access your funds instantly once the QDRO is finalized.
First, How Long After a Divorce Can You File a QDRO?
The good news is that it is never too late to file a QDRO. However, you should file a QDRO as soon as you can.
Many people wait too long to begin their QDRO process, sometimes mistakenly believing that the divorce needs to be final before a QDRO can be issued. However, you can file a QDRO anytime according to ERISA’s rules. The QDRO process tends to be a lot faster if you begin before your divorce is final.
If you fail to get a QDRO promptly, the ex-spouse participating in the retirement plan could retire and begin withdrawing from the account. The non-participant spouse could be entitled to part of the withdrawn money and claim it retroactively.
Now, Onto the QDRO Process
The first person’s approval you will want when a QDRO is drafted is that of your former spouse. The QDRO should reflect the conditions of the separation agreement, so it shouldn’t come as a surprise to your ex-spouse. However, if your former spouse is uncooperative, it is not necessary to have them sign the QDRO at this point.
Next, the QDRO will be sent to the plan administrator, who will likely suggest edits. The plan administrator will require that the QDRO use specific language, so the wording of the document is usually what needs to be changed rather than the dollar amounts.
After the QDRO has been pre-approved by the plan administrator, you and your ex-spouse will need to sign the document. Should your ex-spouse refuse to sign, you can file a motion requesting a court clerk to sign on behalf of your former spouse.
After the QDRO is pre-approved and signed, you can submit it to the court for the judge’s approval. You will need to file your QDRO with the court that has jurisdiction over your divorce. Once the judge signs the QDRO, a certified copy will be sent to your plan administrator. Courts are notoriously slow, so your QDRO might take more time than expected even if the rest of the process goes smoothly.
How Long Does It Take to Process a QDRO?
Several processes need to take place for a QDRO to be finalized. An order needs to be drafted based on the separation agreement, and you will need the approval of your ex-spouse and their attorney. If your spouse is cooperative, this should not take long, but an uncooperative ex-spouse will prolong the process.
Next, you will need to obtain the retirement plan information necessary to draft the QDRO.
The order will need to be submitted to a court for approval and then to the clerk for filing. You must then obtain a certified copy of the signed and filed order. Depending on the court, this legal process may take one to three separate steps.
Finally, the plan administrator needs to deem the order qualified, which will end the QDRO process.
How Long Does It Take to Get Approvals?
The QDRO process requires approvals from the couple, the lawyers, the judge, and the plan administrator.
First, the couple and their lawyers review the QDRO. So long as the QDRO follows the terms of the separation agreement, this approval should not take long at all.
Next, the QD

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