Q: Does SCERS accept DROs from out-of-state courts?
A: SCERS serves California employees, and the dissolution will typically be filed in California Superior Court. SCERS requires a court-filed DRO signed by a judge. If the member and non-member are in different states, consult with a California family law attorney about jurisdiction — the DRO must come from a court with jurisdiction over the retirement account division.
Q: Can the non-member spouse access SCERS benefits before the member retires?
A: Yes — but only if the non-member's separate account has been established and the non-member meets retirement eligibility requirements. Non-members with separate SCERS accounts can retire independently. The eligibility rules depend on the tier and membership category.
Q: What happens to the non-member's separate account if they remarry?
A: Remarriage does not affect a non-member's separate SCERS account. The account was established as a result of the property division — it belongs to the non-member regardless of subsequent relationship status.
Q: How long does it take SCERS to implement a DRO?
A: Advance review typically takes several weeks. After the court-signed DRO is submitted, implementation timelines vary. Budget several months from initial draft to full implementation.
Q: Can a DRO be used to divide SCERS disability retirement benefits?
A: Community property rules apply to disability retirement benefits earned during marriage. However, the non-member may not independently claim disability retirement through SCERS. The DRO can provide the non-member a share of the member's disability benefit, structured consistent with SCERS plan rules.
Q: What if the member retires before the DRO is finalized?
A: SCERS may implement a DRO even after retirement — but the division method changes. For already-retired members, SCERS splits the ongoing monthly payment (no separate account), typically using the Time Rule Formula. The DRO should be drafted to address this contingency.
Q: Does the non-member spouse get COLAs on their share?
A: Generally yes, if the DRO specifies that the non-member's share tracks SCERS COLA adjustments — which is standard practice. The DRO should explicitly address COLA rights to avoid future disputes.
Q: Is a SCERS DRO taxable?
A: SCERS benefits are taxed as ordinary income when received. The non-member's share, once paid, is taxable to the non-member. If the non-member withdraws contributions in a lump sum, that amount is generally taxable as ordinary income (unless rolled into an IRA or eligible retirement account). Consult a tax advisor on the specific implications.
Q: What is the difference between a joinder and a DRO?
A: A joinder is a procedural step that makes SCERS a party to the divorce case, putting the plan on notice of the non-member's claim. A DRO is the substantive court order that actually divides and directs payment of benefits. SCERS requires both. The joinder must come first — without it, SCERS will not process or implement the DRO.
Q: My spouse's employer is a Sacramento special district, not the County itself. Does SCERS still apply?
A: Possibly yes. Eleven participating employers use SCERS, including several park districts and cemetery districts in Sacramento County. Verify your spouse's specific employer and confirm with SCERS whether that employer is a SCERS participant.