Compliance March 22, 2006

Ford Gets Rebuff Over QDRO Case Argument

March 22, 2006 (PLANSPONSOR.com) - A federal judge in Michigan has ruled that Ford Motor Co. was out of line when it told the ex-wife of a dead participant that any rights she had to his benefits expired upon his death.
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US District Judge Lawrence Zatkoff of the US District Court for the Eastern District of Michigan turned aside Ford’s argument that Marilyn Galenski’s right to assets from her ex-husband’s pension was no longer valid when he died because she had not obtained the required qualified domestic relations order (QDRO) until afterwards.

According to Zatkoff, the evidence in the case demonstrated that a valid QDRO was actually in place prior to Joseph’s death. The court also noted that there is no provision in the Employee Retirement Income Security Act (ERISA) that requires that a QDRO be entered prior to the death of a participant

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The participant, Galenski, worked for Ford for 20 years. In 1983, while still employed by Ford, Galenski filed for divorce from his wife. The divorce judgment required him to make child support payments, according to the court. Joseph Galenski ceased working for Ford in 1989 and as a result of his 20 years of service with the company, he was eligible to begin receiving pension benefits in March 2003 when he reached age 55.

According to Zatkoff, when Joseph ceased employment with Ford, he stopped making the child support payments to his ex-wife. In 1998, the state of Indiana filed a lien against Joseph Galenski’s interest in the plan for $51,000 in unpaid child support.

In October 2001, a QDRO was entered in an Indiana state court. Under the terms of this QDRO, Marilyn Galenski was entitled to 100% of her ex-husband’s benefits under the plan to pay for the child support arrearage. The QDRO was later amended and filed in an Indiana state court in February 2002.

After the amended QDRO was filed, Marilyn and Ford learned that Joseph had died in June 2001. Ford then informed Marilyn her entitlement to benefits ceased at the time of Joseph’s death.  The court said that the 1998 Indiana lien constituted an acceptable QDRO and noted that Marilyn had presented Ford with a proposed QDRO as early as March 31, 1998.

The case is Galenski v. Ford Motor Co. Pension Plan, E.D. Mich., No. 05-CV-71441-DT, 3/17/06.

Benefits March 21, 2006

ADP: Job Applicant Background Checks up 12% in 2005

March 21, 2006 (PLANSPONSOR.com) - Although the number of employment background checks performed in 2005 by ADP Employer Services was up 12% over the year, inconsistencies between an applicant's material and the source were down slightly.
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A news release said that ADP’s 2005 Screening Index showed that its Screening and Selection Services unit carried out 4.86 million checks, up from the 4.3 million in 2004 (See ADP: 16% Rise In Use of Background Checks in 2004 ).

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ADP said it found a data inconsistency in education, employment and credential verifications in 49% of the cases in 2005 – down a tick from the 50% found in 2004. The 2004 figure itself represented a 2% drop from 2003, according to the ADP data.

“The consistent rise in the number of background checks performed year after year is evidence of the diligence employers are taking in the recruitment and hiring process,” said Dean Suposs, General Manager of ADP Screening and Selection Services, in the news release.

ADP also reported that in 2005:

  • 5% of the criminal background checks revealed a criminal record in the last seven years.
  • 6% of the data inconsistencies discovered were received with negative remarks about the applicant
  • among the completed driving record checks, 24% had one or more violations or convictions. Five percent had four or more.
  • 46% of the completed credit report checks showed a judgment, lien or bankruptcy, or the employee had been reported to a collection agency.
  • 8% of the workers’ compensation inquiries revealed an existing claim.

For additional Screening Index statistics go here .

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