TIAA traditional/divorce/RMD questions

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Scarlett
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Joined: Mon Sep 07, 2015 6:47 pm

TIAA traditional/divorce/RMD questions

Post by Scarlett » Mon May 21, 2018 4:55 pm

I have not posted here for a while. I was divorced almost 2 years ago, and my ex-husband has not yet transferred any of the substantial retirement funds that he owes me. Our financial situation was uncomplicated, only liquid assets, it was a 35-year marriage, and the asset split was supposed to be 50/50 (after subtraction of a small pre-marital account that he had, plus investment gains on those assets). He is older and always had a higher salary, so there were more retirement assets in his name.

He has been doing everything possible to avoid transferring the money he owes me. It's a very long story, and I am still paying high legal fees.

The actuary who is doing the QDROs has suggested 3 QDROs to handle 3 situations. My question has to do with one of these QDROs that will deal with TIAA accounts.

There were 4 employer plans at TIAA that were to be divided. One of these employers was his current employer until he retired in mid-2017, and so although he's had to take RMDs from some accounts for several years, the 3 former-employer plans were sheltered because they were under the same contract numbers as his current employer plan. The year before he retired he put those 3 plans into RMD payout, and this past year when he retired he put the 4th plan into RMD payout. He was subject to RMDs on all plans in 2017, the year he retired, but he did not have to take them from the other 3 plans in 2016, and even in 2017 he could have aggregated his RMDs and taken them from other accounts that were not still to be divided.

I've spoken to one person at TIAA who basically said that if the accounts were RMD contracts, that was what they would divide and I would be taking RMDs. This is the last thing I want, because I am working and don't want to take distributions, I am not old enough to be required to do so, and even when I will be my ex-husband's RMD schedule is accelerated compared to mine.

I am concerned because my ex-husband has a lot more money at TIAA than I do. He has more money because he owes a lot of it to me, and he has moved all of his assets to TIAA, some of them in one of their portfolio management accounts, and I still have (and intend to keep) money at Vanguard. Basically my plan is to keep my own TIAA traditional shares and the ones that I am supposed to get from my ex-husband, with the rest of my assets at Vanguard. He lined up the "divorce manager" and they assign only one person to each divorce. I am worried that they are working for him and not for me.

I am trying to figure out what to ask for to compensate for the reduction in account values due to 2 years of RMDs from 3 plans and 1 year from the 4th, and the fact that I will be forced to take RMDs. I want these accounts, rather than other IRAs, because they are in TIAA traditional, old vintages, and I want to have as many of those shares as possible.

I am sorry for the long post. I hope that someone has an idea for me!

The Wizard
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Re: TIAA traditional/divorce/RMD questions

Post by The Wizard » Mon May 21, 2018 5:53 pm

Sounds like your ex is in Contempt of Court.
(I am not a lawyer.)
Have your lawyer do what your state requires to get him back into court to put more FEAR into him.
And have him pay your extra legal fees while you're at it...
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The Wizard
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Re: TIAA traditional/divorce/RMD questions

Post by The Wizard » Mon May 21, 2018 6:03 pm

Additionally, I got divorced over two decades ago and QDRO'd a portion of my TIAA accumulation to my ex in a timely fashion, although TIAA took what seemed to be a long time once they got the paperwork.

And TIAA should definitely be able to undo the RMD contract that your ex needed to set up. The court needs to be firm with those clowns about this...
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Scarlett
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Re: TIAA traditional/divorce/RMD questions

Post by Scarlett » Mon May 21, 2018 6:04 pm

Thanks, Wizard. My lawyers have just filed our 4th contempt of court motion. He has gotten out of previous motions by agreeing to do everything I asked, forcing me to withdraw the motion, and then when the pressure is off he delays. He's done a lot of underhanded things that have cost me a lot of time and money to discover. My lawyer has subpoenaed a lot of information and we now have proof of some things he's done. He has had to pay some of my legal fees along the way, but not nearly enough.

My problem with the TIAA situation is that I don't know what to ask for that will get me what I should have had.

There are also two other situations that have to be resolved. There, I know exactly what to ask for, at least.

Scarlett
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Re: TIAA traditional/divorce/RMD questions

Post by Scarlett » Mon May 21, 2018 6:06 pm

The TIAA divorce manager said that nothing can be undone, that he has an RMD contract now and that is what will be divided.

Also, the judge froze my ex-husband's accounts at TIAA several months ago (we had a lot of documentation then, even more now), yet they just sent him a distribution.

The Wizard
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Re: TIAA traditional/divorce/RMD questions

Post by The Wizard » Mon May 21, 2018 6:25 pm

Scarlett wrote:
Mon May 21, 2018 6:06 pm
The TIAA divorce manager said that nothing can be undone, that he has an RMD contract now and that is what will be divided.

Also, the judge froze my ex-husband's accounts at TIAA several months ago (we had a lot of documentation then, even more now), yet they just sent him a distribution.
The TIAA divorce manager is inexperienced, naive, or both.
With a proper court order almost anything can be undone.
Have your lawyer send them a letter requesting that they remove the silly RMD contract from your newly QDRO'd account or he will get a more specifically worded QDRO from the judge on this...
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Scarlett
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Re: TIAA traditional/divorce/RMD questions

Post by Scarlett » Mon May 21, 2018 6:57 pm

There is no QDRO yet, and before one is prepared I have to figure out how to structure it in the best way for me. Are you saying that I should have the accounts divided and then demand that TIAA reverse the RMD contract?

The Wizard
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Re: TIAA traditional/divorce/RMD questions

Post by The Wizard » Mon May 21, 2018 7:09 pm

Scarlett wrote:
Mon May 21, 2018 6:57 pm
There is no QDRO yet, and before one is prepared I have to figure out how to structure it in the best way for me. Are you saying that I should have the accounts divided and then demand that TIAA reverse the RMD contract?
Correctamundo.
And have the judge sign it with that phrase included.
TIAA trying to force RMDs on someone younger than 70.5 is plain silly...
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Scarlett
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Re: TIAA traditional/divorce/RMD questions

Post by Scarlett » Mon May 21, 2018 7:56 pm

The person at TIAA who told me that the RMD contracts could not be reversed, and that if this is what my ex-husband has, then that is what would be divided, is the divorce manager assigned to my case. I called a couple of weeks ago to ask for a divorce consultant, and I was told that there was already one assigned to me. They assign one person to handle each divorce. I am pretty sure that my ex-husband asked for one, and he has probably already been talking to her. I definitely got the message that she has no interest in helping me. As my ex-husband has a lot more money at TIAA than I do, and he has a portfolio manager, they are probably on his side. I don't know that the family court judge would even know enough about TIAA to be able to order anything - at the moment, TIAA has ignored a court order freezing my ex-husband's accounts and distributed an RMD. Family court does not seem to have much clout. Very frustrating.

Katietsu
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Re: TIAA traditional/divorce/RMD questions

Post by Katietsu » Mon May 21, 2018 8:05 pm

Here is some language from a TIAA form from a couple of years ago. I would see if you can find the information associated with your spouse’s accounts and then look into what might be done about it.

"If my employer’s plan requires TIAA to issue me new Minimum Distribution Option Contracts, then payments cannot be stopped once they begin. Payments will continue until the entire amount placed in the Minimum Distribution Option contract has been paid out, withdrawn, or converted to annuity income as per the terms of the Minimum Distribution Option contract.*

*Please note that in lieu of issuing me a Minimum Distribution Option (MDO) contract, to the extent available under my plan, TIAA may provide me with a Recurring Required Minimum Distribution (RRMD) Option feature which provides for automated minimum distributions without issuing a new contract. Note that an RRMD payment from a Retirement Annuity or Group Retirement Annuity contract once started cannot be stopped. Any other RRMD payment stream may be stopped and restarted at my direction."




If, in the end, you do need to take RMD’s, I would try not to get too stressed about it. In other words, try to focus on the big picture and not the smaller bits.
Last edited by Katietsu on Mon May 21, 2018 8:10 pm, edited 1 time in total.

Scarlett
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Re: TIAA traditional/divorce/RMD questions

Post by Scarlett » Mon May 21, 2018 8:10 pm

katietsu, thank you for the information. I believe that 3 of the 4 employer plans have been converted to MDO contracts, because the original contract numbers have been replaced with new MDO contract numbers. The 4th plan still has the original contract numbers so it might be an RRMD situation. I'm not sure if this plan is considered a retirement annuity or group retirement annuity.

Alan S.
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Re: TIAA traditional/divorce/RMD questions

Post by Alan S. » Mon May 21, 2018 11:08 pm

Per IRS Reg. 1.401(a)(9)-8 QA 6, the RMD for an alternate payee under a QDRO is subject to the RMD rules applicable to the participant. Therefore, even if the participant was not subject to RMDs at the time of a QDRO, but became subject to RMDs (reached the required beginning date) later on, RMDs would also start for the alternate payee.

Sounds like TIAA is therefore correct. While some alternate payees are therefore forced to take distributions when they do not need it, many more need to withdraw funds at least equal to the RMD they are required to receive. Amounts received by the alternate payee directly from the plan are not subject to the 10% penalty under the QDRO exception even if the AP is under 59.5.

Scarlett
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Re: TIAA traditional/divorce/RMD questions

Post by Scarlett » Mon May 21, 2018 11:22 pm

Alan S. wrote:
Mon May 21, 2018 11:08 pm
Per IRS Reg. 1.401(a)(9)-8 QA 6, the RMD for an alternate payee under a QDRO is subject to the RMD rules applicable to the participant. Therefore, even if the participant was not subject to RMDs at the time of a QDRO, but became subject to RMDs (reached the required beginning date) later on, RMDs would also start for the alternate payee.

Sounds like TIAA is therefore correct. While some alternate payees are therefore forced to take distributions when they do not need it, many more need to withdraw funds at least equal to the RMD they are required to receive. Amounts received by the alternate payee directly from the plan are not subject to the 10% penalty under the QDRO exception even if the AP is under 59.5.
Alan S., Thank you very much for the information. I had no idea that this was the case. It will simplify resolution of these accounts if I can't escape RMDs anyway. Now I just have to figure out what to do about the RMDs he took that were not required.

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