TIAA QDRO Alert: No Prior Assignment Dates

Do you have or are you working on a QDRO for a TIAA-administered account? If so, this heads-up is for you.

TIAA No Longer Accepts Prior Valuation Dates for QDRO Assignments

The Teachers Insurance and Annuity Administration (TIAA, f/k/a TIAA-CREF) is a large financial services organization that manages retirement plans sponsored by academic, government, medical, cultural, and other nonprofit employers around the country.

As part of recent updates to its written QDRO procedures, TIAA will no longer accept prior valuation dates in QDRO assignments for plans it administers.*

What does this mean? Attorneys and divorcing parties routinely utilize set, prior dates to value defined contribution (i.e., 457(b)s, 403(b)s, etc.) retirement plan assignments. A valuation date may represent the end of the marital period for purposes of determining the ‘marital portion’ of the account. Attorneys do this for a variety of reasons. Maybe after the parties separated, it took them a while to reach an agreement, but they still wanted to divide their assets as of their original separation date. Maybe the parties or the court simply utilized one, primary date around which they’ve valued as many of their assets as possible. Or, if the employee/account owner is still contributing to his or her account, they rightly may not want to share a portion of these contributions after a certain date.

TIAA’s new policy would result in a rejection of a QDRO drafted to conform to the circumstances above.

TIAA will now only accept QDRO assignments valued as of the date of account division. Meaning, only once TIAA receives the QDRO and establishes the new account(s) in non-account owner’s name.

Why is this important? Parties most often want the marital portion of an account (as of a prior date and sans post-marital contributions) to be subject to market experience (gains/losses), so that neither party alone holds the entire risk or benefit of market fluctuations from the prior valuation date through the date that the account is actually divided. This combined interest is at odds with TIAA’s new policy.

What are your options for current or future TIAA cases? Talk to a QDRO professional to help you assess the most reasonable resolution based on the timing, facts, and circumstances of your individual case.

The considerations can be myriad. But in a few recently affected cases, wherein prior valuation dates were utilized in the parties’ agreements, there were compelling reasons to recommend amending the agreements to utilize the date of account division, in accord with TIAA’s new policy. In other cases, I’ve ‘traced’ the TIAA account(s) from the prior valuation date to the closest feasible point to the date of account division, and ‘stuck a pin’ in the award amount. In other cases, still, based on unique facts and circumstances, I’ve developed additional alternatives and creative solutions. There is no easy answer here, but understanding TIAA’s new policy ahead of the decree can prevent the ever-dreaded post-decree headache.

*Prior assignment date QDROs submitted ahead of this change may still be processed and accepted. Parties and their attorneys should reach out to TIAA, if they think an order they’ve submitted fits this description.

Blog Posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.