"Administration of Qualified Domestic Relations Orders is not something we would do in-house. Even companies with a large HR staff can't do it effectively and efficiently." - Scott Selbe, Packaging Corporation of America

Challenge

Since its spinoff from Tenneco in 2000, PCA has become a stable, growing company by focusing on a single line of business and placing a high value on operational excellence. To support that business philosophy, the human resources team decided to outsource benefits administration right from the start. Outsourcing, they believe, not only supports operational excellence, but also allows them to be more nimble.

One key employee service targeted for outsourcing was the administration of Qualified Domestic Relations Orders, the legal process of dividing retirement benefits during divorce. They knew from firsthand experience that this is a time-consuming and labor-intensive process. In addition, improper handling of this process carries significant risk. An inappropriate allocation, inconsistent allocations, or being out of compliance with federal regulations can open up a
company to lawsuits from employees and their divorcing spouse.

Turning to outside legal counsel for Qualified Domestic Relations Orders administration was an option but was expensive and inefficient.

Solution

PCA chose to outsource the process to Hewitt, seeing several distinct advantages. The Qualified Domestic Relations Orders team at Hewitt is staffed with dedicated, full-time experts, including paralegals, and processes more than 8,000 Qualified Domestic Relations Orders a year. Because Hewitt is its qualified plan recordkeeper, responding to initial subpoenas and other requests for information from the courts is streamlined. Additionally, when the Qualified Domestic Relations Orders are approved and alternate payee accounts need to be set up, it's a seamless handoff from Hewitt's Qualified Domestic Relations Orders team to the benefits administration team. To ensure consistency and operational excellence prior to implementation, Hewitt worked with PCA to define review criteria, quality control standards, and other administrative procedures and requirements.

Results

For nearly a decade, Hewitt's Qualified Domestic Relations Orders team has supported the needs of hundreds of PCA employees going through a divorce proceeding. A very low level of complaints confirms that the team meets PCA's operational excellence and employee satisfaction goals. Employees who need to create a Qualified Domestic Relations Order receive efficient, one-stop shopping by accessing the QOCenter.com Web site or calling the benefits service center where they're quickly and seamlessly redirected to the Qualified Domestic Relations Orders team. PCA is confident that Hewitt's processes and quality control procedures ensure compliance with federal regulations, including the Retirement Equity Act and the Employee Retirement Income Security Act. In the end, employing Hewitt's Qualified Domestic Relations Orders team removes HR involvement in employees' divorce issues, frees up HR for more strategic initiatives, and is a huge time-saver for PCA.