A Qualified Domestic Relations Order (QDRO) is a court order in which a portion of a retirement benefit is assigned to someone other than the participant in the plan. This can be as part of property division in a divorce or for the purpose of spousal support or child support. All or a portion of the retirement benefit can be assigned to a spouse, former spouse, child or other dependent of the participant in the plan.
Typically, this document is prepared by the attorney representing the Alternate Payee. Once it is executed and filed with the court, the QDRO is sent to the retirement Plan Administrator who is reviews it. After the QDRO is approved, benefits will be payable to the Alternate Payee in accordance with the plan’s procedures. For some defined contribution plans an immediate lump sum may be available. That is usually not the case for defined benefit plans. Instead benefits can commence to the Alternate Payee, on a reduced basis, once the Participant reaches the earlier retirement age available under the plan.
When we prepare a Qualified Domestic Relations Order, we follow an extensive process that ensures accuracy and increases the likelihood of quick approval.
We start by carefully reading the Separation Agreement or Divorce Decree. Next, we verify the exact legal name of the plan and determine where the Order should be sent for review. We also request a copy of the plan’s Summary Plan Description (SPD), written QDRO Procedures, and Model QDRO, if available. After this, we determine if the intended division is permitted and clarify any details that were not provided in the Entry. We draft the QDRO to reflect the intent of the parties, meet the requirements of ERISA, and comply with the provisions of the plan. We submit the draft to one of our legal staff members for independent review then transmit it to the Plan Administrator for pre-approval. This enables us to provide accurate, safe, pre-approved drafts that only require signatures and filing.