Overview
Distribution of any portion of the vested account balance of any Participant under the Money Purchase Pension Plan and Trust Agreement of the Police Department of the City of Aurora (MPPP) to his or her spouse pursuant to a Participant's dissolution of marriage, legal separation, or declaration of invalidity of marriage is subject to the requirements of applicable Colorado State Statutes and Internal Revenue Code, and to the requirements of these Rules, Regulations and Procedures. Amounts distributed to a Participant’s spouse may be paid in cash or rolled-over into an IRA. Although cash payments are generally taxable as ordinary income, they are exempt from the 10% early withdrawal penalty even when distribution occurs prior to age 59½.
Please Note: Because AP-MPPP is a public plan, the rules for property division of Plan assets are different than those that apply to retirement plans for privately-employed persons. Colorado law contains special rules for the division of Plan property. The Plan has adopted these rules and has created special forms to comply with such rules. Traditional QDRO rules and forms do not apply to AP-MPPP and cannot be utilized. To avoid confusion and unnecessary expenses, please contact the Plan Administrator for clarification and guidance prior to filing divorce paperwork with the courts
Extremely Important
The rules, regulations and procedures for a domestic relations order pertaining to a retirement plan covering public employees in Colorado, such as the MPPP, are unique and very specific. Governmental Plans are exempt from QDRO provisions provided in the Employee Retirement Income Security Act (ERISA), which typically governs retirement plans for private-sector employees. Therefore, both parties, and/or their respective attorneys, must adhere to the process, and use only the forms provided by the MPPP. Every QDRO must be reviewed and approved by the MPPP Trustees and the MPPP’s legal counsel prior to distribution. Legal and administrative expenses incurred by the MPPP in association with a QDRO are paid directly from the Participant’s account prior to the distribution to a spouse. Please note that the administrative fees charged to process the QDRO (including administrative processing and legal expenses incurred by the Plan) will be deducted from the participant’s account prior to distributing funds to the Alternate Payee.
Summary of the QDRO Process
Both parties and/or their respective attorneys work with the Plan’s Administrator, which is responsible for monitoring each step of the QDRO process. The Administrator’s contact information:
City of Aurora Police MPPP
ATTN: Jared Martin
4643 S. Ulster Street, Suite 1040
Denver, CO 80237
(303) 221-5900
Both parties and/or their respective attorneys request QDRO package from MPPP, which includes detailed procedures, appropriate forms and rollover information.
(Recommended) Participant and the alternate payee, and/or their attorneys, request a copy of the Rules from the Trustees or the Plan's Administrator as soon as possible (either before or after they initiate their domestic relations legal proceedings) and that a draft of the QDRO (Exhibit A of QDRO package) and a draft of the Distribution Election for Alternate Payee (Exhibit B of QDRO package), and copies of the marital or separation agreement and decree be submitted to the MPPP Administrator (City of Aurora-Police MPPP, 4643 S. Ulster Street, Suite 1040, Denver, CO 80237) for approval as to form and content by the Plan’s attorneys, prior to execution and/or presentation of the QDRO to the Court.
The Plan’s attorneys will provide written approval or specific explanation of basis for rejection, within thirty (30) days of receipt of the documents described above.
Within ninety (90) days after entry of Decree and Permanent Orders regarding property distribution in the divorce proceedings, the parties must submit to the MPPP Trustees or the Plan’s attorneys:
A copy of the written marital agreement, or written separation agreement, entered into by the Participant and Alternate Payee, which provides for the division of the Participant’s vested account balance under the Plan.
A copy of the Court Order approving the agreement described in 3(a)
An original copy of the QDRO (Exhibit A of MPPP QDRO package), which is approved by the Court and certified by the Court Clerk
An original copy of the Distribution Election for Alternate Payee (Exhibit B of MPPP QDRO package), which is properly completed, signed and notarized. Additionally, the Alternate Payee must provide an original copy of the properly completed and signed Lawful Presence Affidavit and a photocopy of an approved form of identification.
Following receipt of all properly completed and executed documents described in section 3 (above) a final review is conducted by the Plan’s attorneys, which provides written approval and distribution instructions, or an explanation of procedures to correct any errors.
Distributions to an Alternate Payee may not be processed in less than thirty (30) days from the receipt of the properly completed and executed documents described in section 3 (above). Legal and administrative expenses incurred by the MPPP in association with a QDRO are paid directly from the Participant’s account prior to distribution to the Alternate Payee.
Important: Any delay in the submission of any of the items referenced above will result in a delay in the approval and actual distribution to the Alternate Payee of the QDRO amount; therefore, it is recommended that the Participant, his or her spouse, and/or their respective attorneys submit all of these documents to the Trustees or the plan’s attorneys as soon as possible after a divorce proceeding is initiated.
Understanding the Terms
Plan – The Money Purchase Pension Plan and Trust Agreement of the Police Department of the City of Aurora (also referred to a MPPP).
Participant – The person who maintains a MPPP retirement account.
Alternate Payee – The person who is the spouse of the Participant
Divorce – Dissolution of Marriage, Legal Separation, or Declaration of Invalidity of Marriage.
QDRO – Qualified Domestic Relations Order as provided for under the MPPP.
Trustees – The Board of Trustees and Plan Administration Committee of the Money Purchase Pension Plan and Trust Agreement of the Police Department of the City of Aurora (MPPP).