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COLLECTED WISDOM™ on Qualified Domestic Relations Orders -- QDROs

You are the plan administrator for your company's retirement plan. A plan participant comes to you for information and advice about the possible effects that an impending divorce might have on his benefits. What does the Employee Retirement Income Security Act (ERISA) require of you? Here is some information that will help.

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The Divorce Penalty: This 401k Fee Can Add Insult to Injury

Abstract: As more wealth accumulates in defined-contribution plans and divorcing baby boomers move to split it up, more retirement savers are getting to know a little abbreviation that packs a big punch in frustration and exasperation: QDRO.

Source: Bloomberg.com, January 2017

Dividing Qualified Retirement Plan in Divorce Via a Qualified Domestic Relations Order

Abstract: Fortunately for divorcing couples, there is a mechanism called a Qualified Domestic Relations Order which can be used with qualified retirement plans to divide the assets between divorcing spouses without the funds losing their favorable tax treatment and without application of any early-withdrawal penalties.

Source: Ctlawtribune.com, January 2017

What Is a Qualified Domestic Relations Order and Why Should I Care?

Abstract: A retirement plan can be the largest asset in a marriage. Nonetheless, retirement plans are often forgotten or overlooked during divorce. A qualified domestic relations order is a special court order that grants a person a right to a portion of the retirement benefits his or her former spouse has earned through participation in an employer-sponsored retirement plan.

Source: Pensionrights.org, November 2016

Beware the Retroactive QDRO

Abstract: Employers know that they must honor qualified domestic relations orders (QDROs) that assign a portion of a retirement benefit to a participant’s former spouse, known as an alternate payee, when the participant and alternate payee divorce. Those orders by law are not allowed to provide greater benefits than were otherwise provided under the plan. A recent federal district court case ignored that provision when it recognized a retroactive QDRO.

Source: Benefitsnotes.com, April 2016

Appellate Court Weighs In on Posthumous QDRO

Abstract: Appeals court rules on the validity of certain posthumous qualified domestic relations orders, and whether divorce settlement agreements qualify as or supersede QDROs.

Source: Planadviser.com, July 2015

QDRO Distributions and the Age of 50

Abstract: A defined contribution plan document generally may call for either waiting until the participant is age 50 or permit distribution of the designated amounts as soon as the order is otherwise deemed to a QDRO. If the document is silent on the issue, the alternate payee(s) must wait until the participant attains age 50 to receive a QDRO distribution.

Source: Mhco.com, December 2014

How to Avoid Errors in QDROs

Abstract: When it comes to qualified domestic relations orders (QDROs), plan sponsors and recordkeepers need to head off potential issues before they become larger problems.

Source: Plansponsor.com, June 2014

Drafting Qualified Domestic Relations Orders

Abstract: What is the best way to divide a participant's pension benefits in a QDRO? How much can be given to an alternate payee through a QDRO? What are survivor benefits, and why should a QDRO take them into account? These are just a few of the questions discussed in this FAQ.

Source: U.S. Department of Labor, July 2013.

Qualified Domestic Relations Orders Toolkit

Abstract: Resources to assist a retirement plan administrator in reviewing and approving domestic relations orders (DROs) relating to the division of retirement plan benefits to determine if the DROs are qualified (QDROs).

Source: Practicallaw.com, May 2013

Domestic Relations Orders

Abstract: Definition: A qualified domestic relations order (QDRO) means a domestic relations order (DRO) which creates or recognizes the existence of an alternate payee's right to (or assigns to an alternate payee the right to) receive all or a portion of the benefits payable with respect to a participant under a plan, and meets certain requirements.

Source: Retirementdictionary.com, March 2013.

The Division of Retirement Benefits Through Qualified Domestic Relations Orders

Abstract: This publication provides general information about the qualified domestic relations orders (QDROs) under the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986. This booklet was prepared to provide general guidance about QDROs to employers, retirement plan administrators, participants, beneficiaries, employee benefit professionals, and domestic relations specialists.

Source: U.S. Department of Labor, June 2012.

Plan Sponsor Basics on QDRO Administration

Abstract: Morgan Lewis a webinar focused on plan sponsor administration of qualified domestic relations orders (QDROs). Topics discussed included: QDRO basics, including types of benefit divisions (segregated benefits, shared payments, and plan design alternatives); Processes and procedures for QDRO administration; QDROs and nonqualified retirement plans; and, QDROs and equity compensation and other executive programs. Here are the slides from the presentation.

Source: Morgan, Lewis & Bockius LLP, April 2012

How a QDRO Can Protect Retirement Assets During a Divorce

Abstract: Retirement assets typically represent a large proportion of a couple's savings. Many times, these funds are connected to an employer-sponsored 401k or other account. It is important to carefully consider how these funds will be divided during divorce proceedings.

Source: 401khelpcenter.com, March 2012

Applying the QDROtic Equation in Qualified Plans

Abstract: The recently decided Fifth Circuit decision, Brown v. Continental Airlines, Inc., demonstrates how nine airline pilots and their spouses creatively used qualified domestic relations orders (QDROs) and state domestic relations law to circumvent the early distribution rules in their retirement plan.

Source: Fox Rothschild LLP, November 2011.

DOL Issues Final Rules on QDRO Distributions

Abstract: Because the determination of whether a domestic relations order is to be considered a "qualified" order is a fiduciary act under ERISA, article recommends that all plan sponsors review their written QDRO determination procedures and familiarize themselves with the new Rule's requirements and illustrative examples.

Source: Masuda, Funai, Eifert & Mitchell, Ltd, June 2010.

Final Department of Labor QDRO Guidance Issued

Abstract: The U.S. Department of Labor (DOL) has published final regulations clarifying the rights and obligations of parties seeking to obtain benefits from certain retirement plans under qualified domestic relations orders (QDROs).

Source: Drinker Biddle & Reath LLP, June 2010.

DOL Releases Final Regulations Relating To Time and Order of QDROs

Abstract: The regulations, which are effective July 30, 2010, are substantially similar to the interim final rule issued in 2007, but several changes were made to the examples given, and one additional example was added.

Source: Sutherland Asbill & Brennan LLP, June 2010.

QDRO's

Abstract: When you need to transfer an interest in a qualified retirement plan, you'll need to use a QDRO, a Qualified Domestic Relations Order. A short item on QDRO Must Have's, Must Not's, Lawyer Issues, and Issues For You.

Source: Divorceinfo.com.

Seven Key Questions You Need to Ask Before Your Divorce is Finalized

Abstract: To make an intelligent decision on how to divide a pension, find out what kind of pension it is, how it is funded, how it pays out, and ask these seven key questions before your divorce is finalized.

Source: Women's Institute for a Secure Retirement.

Deferred Compensation, Retirement Plans & Divorce

Abstract: Deferred compensation refers to pension plans, 401k plans, IRAs and other retirement assets. Such plans are divisible as part of a property settlement in divorce regardless of which party is named on the plan. How they are divided depends on the value and nature of the asset.

Source: Freeadvice.com.


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