CTQDROS | Metro North
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Metro North employees may have two pensions:
The MTA (aka Metro North) Pension and Railroad Retirement Board (RRB) benefits.

  • Railroad Retirement Board (RRB)
    • Plan Components: The RRB has two components: Tier I, which is the functional equivalent of Social Security and cannot be divided by court order, and Non-Tier I, which is made up of Tier II and, sometimes, a small supplemental benefit.  For simplicity’s sake, the Non-Tier I will be referred to as Tier II.
    • Tier II benefits assigned by court order will be paid for the life of the former spouse unless the court orders that they terminate sooner.
  • Offset for MTA Pension
    • Payments from the MTA pension will be offset, dollar for dollar, by payments from the RRB Tier II benefits, to the extent the RRB Tier II benefits were earned through MTA employment.
    • If the employee worked only for MTA, and is entitled to $1500/month from the Metro North Defined Benefit pension plan, and $500/ month from the RRB Tier II pension, he will get $1,000/month from the MTA, and $500/ month from the RRB Tier II.
    • Because of this offset, it is recommended that the same formula be used for each plan.  Since the MTA will not calculate a benefit earned as of the date of divorce, the award must be based on benefits at retirement.  A traditional coverture formula will work for both:
  • MTA:
    • The MTA pension is slightly different: payments will only be made for the MTA employee’s lifetime unless the employee is ordered to elect a survivor benefit for the former spouse.
    • The MTA survivor options are either a lifetime survivor annuity or a guaranteed payment term.
    • The survivor annuity would be based the entire pension at retirement, prior to reduction for any amount assigned by QDRO.
    • Possible survivor options are a 25% survivor annuity; 50% survivor annuity, 75% survivor annuity and 100% survivor annuity The guaranteed periods are a life annuity (payable for employee’s life) with a minimum period of 5 years or 10 years, meaning the employee will receive an annuity for his lifetime, but if he dies in less than 5 or 10 years, payments will be made to his named beneficiary for the remainder of the 5 or 10 year term.   If the employee is remarried when he retires, his current spouse would have to waive survivor benefits for him to be able to provide survivor benefits to a former spouse.
    • Survivor benefits are not always appropriate. The percentage is based on the total pension at retirement.  The pension will be reduced to provide the survivor benefit. If survivor benefits are assigned, the employee will not be able to provide survivor benefits to anyone else.
  • Possible Language:
    • If both pensions are to be divided, you must use the same formula for each.  This is because payments from the MTA pension are offset by payments from the Railroad Retirement Board Tier II (to the extent that the RRB benefits were earned through Metro North or MTA employment).   In such an event, the following language would work (The first example uses a flat percentage. The second uses a coverture formula):

Flat Percentage:

RRB: The former spouse is assigned xx% of the employee’s Railroad Retirement Board Tier II (and non-Tier I) pension earned as of the date of divorce.  Former spouse’s share shall be payable to her for her lifetime. (Note, with a flat percentage as of a date prior to retirement, the RRB will convert the assignment to a monthly dollar amount. They will not include cost of living adjustments.)

MTA: The former spouse is assigned xx% of the employee’s MTA Defined Benefit Pension Plan earned as of the date of divorce.  This assignment shall include a proportionate share of cost of living adjustments.  (Payments will stop on the first death unless survivor benefits are assigned)

If survivor benefit to be assigned:

Former spouse is also assigned a [choose level, remembering that this percentage will be applied to the total pension at retirement, and will preclude the employee’s ability to provide survivor benefits to anyone else] [25% or 50%] survivor annuity.  The parties understand that the survivor annuity will be based on the total pension at retirement. Payments to former spouse will commence when employee retires and goes into pay status, and will terminate on the first death, after which the former spouse will receive the survivor annuity.  If former spouse dies first, future monthly payments will revert to the employee.

Coverture Formula:

RRB: The former spouse is assigned xx% of the employee’s Railroad Retirement Board Tier II (and non-Tier I) pension to be computed as follows:  At retirement, the pension will be multiplied by a fraction, the numerator of which is the months of service credited as of the date of divorce, and the denominator of which is the total months of service credited as of the employee’s retirement.  This assignment shall include a proportionate share of cost of living adjustments.  Former spouse’s share shall be payable to her for her lifetime.

MTA: The former spouse is assigned xx% of the employee’s MTA Defined Benefit Pension Plan to be computed as follows:  At retirement, the pension will be multiplied by a fraction, the numerator of which is the months of service credited as of the date of divorce, and the denominator of which is the total months of service credited as of the employee’s retirement. .  This assignment shall include a proportionate share of cost of living adjustments.  (Payments will stop on the first death unless survivor benefits are assigned)

If survivor benefit to be assigned:

Former spouse is also assigned a [choose level, remembering that this percentage will be applied to the total pension at retirement, and will preclude the employee’s ability to provide survivor benefits to anyone else] [25% or 50%] survivor annuity.  The parties understand that the survivor annuity will be based on the total pension at retirement. Payments to former spouse will commence when employee retires and goes into pay status, and will terminate on the first death, after which the former spouse will receive the survivor annuity.  If former spouse dies first, future monthly payments will revert to the employee.

It is your responsibility to make sure that the terms you eventually use in the separation agreement fit the circumstances and are appropriate for your client.