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Di Giacinto v. Ariz. State Retirement Sys - 4/4/2017

Arizona Court of Appeals Division One holds that a former spouse is treated as a “spouse” for ASRS survivor benefits awarded under a domestic relations order.

An employee retired from an employer that participated in the Arizona State Retirement System (“ASRS”).  The employee elected a 100% joint and survivor annuity, which paid a reduced benefit amount but provided survivor benefits to his spouse if she outlived him.  The couple later divorced and a court issued a domestic relations order (“DRO”) which divided the payments from that annuity during the employee’s life and assigning all survivor benefits to the former spouse. 

ASRS approved a draft of the DRO and agreed to comply with the final court-entered DRO.  The employee later requested that ASRS review the DRO.  ASRS determined that the DRO was not acceptable because it violated a regulation limiting the survivor benefits available to a “nonspouse.”  The former spouse appealed that determination within ASRS and lost.  The trial court also affirmed, and the former spouse then appealed to the Court of Appeals.

The Court of Appeals reversed, holding that a former spouse should be treated as a spouse.  The applicable Arizona regulations and statutes do not define the term “nonspouse” which could be read to include former spouses.  The regulation does reference the federal Internal Revenue Code, which provides that a former spouse will be treated as a spouse for benefits under a qualified domestic relations order (“QDRO”).  That definition is therefore incorporated into the Arizona regulation.  A court-issued DRO is a QDRO and so the former spouse was a spouse for purposes of the ASRS survivor benefits.

Presiding Judge Peter B. Swann authored opinion; Judges Cattani and Kessler concurred.

Posted by: Brian K. Mosley

Posted On: 5/2/2017