HBA-LJP H.B. 413 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 413
By: Zbranek
Juvenile Justice & Family Issues
2/14/2001
Introduced



BACKGROUND AND PURPOSE 

In a decree of divorce or annulment, the court determines in a qualified
domestic relations order the rights of both spouses in a private pension or
retirement plan. Under current law, a qualified domestic relations order
follows certain guidelines, but does not have a uniform format. As a
result, an alternative payee could be divested of the payee's interest if
the spouse dies before the Employee Retirement Income Security Act (ERISA)
administrator accepts a qualified domestic relations order. House Bill 413
creates a uniform format for a qualified domestic relations order and
establishes a cause of action by the alternate payee against a plan
administrator or other person, acting in an equivalent capacity. 


RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 413 amends the Family Code to add a chapter relating to
qualified domestic relations orders. The bill requires a plan administrator
or another person acting in an equivalent capacity for a private pension or
retirement plan to accept as a qualified domestic relations order in lieu
of any other order, a domestic relations order that is substantially in the
same form detailed by the bill (Secs. 10.002 and 10.003). 

The bill provides that if a plan administrator or another person acting in
an equivalent capacity for a plan rejects a qualified domestic relations
order, the alternate payee may report that person to the secretary of
state. The bill requires the secretary of state, after notice and hearing,
to determine whether the plan administrator or other person illegally
rejected a qualified domestic relations order and, if so, the secretary of
state is required to prohibit the plan administrator or other person from
engaging in business in this state. The bill provides that a private
employer who provides a private pension or retirement plan to an employee
or retiree is liable if an alternate payee incurs a pecuniary loss with
respect to the amount of the benefit payable under the plan because of a
rejected qualified domestic relations order (Secs.10.004 and 10.005). The
bill provides that an alternate payee may recover actual damages and
reasonable attorney's fees and costs (Sec. 10.006). 

EFFECTIVE DATE

September 1, 2001.