The State Court of Appeals determined that NYSLRS benefits that are acquired during a marriage are marital property, and subject to equitable distribution upon a member’s divorce, pursuant to Domestic Relations Law Section 236 (Majauskas v. Majauskas, 61 NY2d 481, 474 NYS2d 699). When a NYSLRS member is divorced, a court may determine that the member’s ex-spouse is entitled to share in the member’s benefit. Therefore, we will honor a properly drawn Domestic Relations Order (DRO) issued by a New York State court. (For information about a DRO issued by other states, see Out-of-State Orders.)
A DRO is a court order issued after a final judgment of divorce that provides the ex-spouse of a member with a share of the member’s benefit upon retirement. The DRO may also require a member to designate the ex-spouse as a beneficiary of a pre-retirement death benefit, a post-retirement death benefit (if applicable) or as the beneficiary of the member’s pension payment option.
NYSLRS must have an approved DRO on file, and proof of divorce, to make direct pension payments to an ex-spouse of a member. A copy of the parties’ judgment of divorce is sufficient proof of divorce (we cannot pay the ex-spouse based on the contents of a judgment of divorce or settlement agreement alone). If either party disputes the terms of the DRO on file with NYSLRS, they must return to court to obtain an Amended Order.
Please note that, unlike a private pension plan, the rights of membership in NYSLRS belong only to the member. The spouse of a member has no statutory rights or protections. As a governmental plan, NYSLRS is exempt from the provisions of the Employee Retirement Income Security Act (ERISA), the Retirement Equity Act of 1984 and the Internal Revenue Code (IRC) that provide for Qualified Domestic Relations Orders (QDROs) (see ERISA Section 4 (b) and IRC Section 414 (P) (9)). The spousal notification, spousal consent and surviving spouse protections of ERISA do not apply in the case of a state governmental plan. All rights given to an ex-spouse must be set forth explicitly in the DRO or they will not exist for them.
If the ex-spouse was not awarded an interest in any pension benefit payable by NYSLRS, the parties are not required to file divorce-related documents with NYSLRS. The parties are only required to provide a DRO and proof of divorce if the ex-spouse is entitled to a pension or death benefit payable by NYSLRS.