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Qualified
Domestic Relations Order (QDRO)
A
QDRO is a court order, which is used to divide pension rights
between divorcing spouses, or to collect alimony or child
support from an employee benefit plan.
What
types of pension plans are subject to QDROs?
Private pension and benefit plans such as 401(k), 403(b),
457, defined benefit monthly payment, TIAA/CREF, etc., may be
divided by a QDRO under a Federal law called "ERISA."
Military retired pay, Federal and State government civil
service plans, and IRAs may be divided by similar orders known
as Qualifying Court Orders (for military retired pay under the
Uniformed Services Former Spouses Protection Act, or USFSPA),
Court Orders Acceptable for Processing (for Federal civil
service plans), and Transfers Incident to a Divorce (for
IRAs). Our firm prepares all types of these orders: QDROs for
corporate (ERISA) plans, QCOs for military retired pay, COAPs
and RBCOs for Federal and State civil service plans, and TIDs
for IRAs.
How
do QDROs work?
The State divorce court first enters an order dividing a
pension. This court order may be entered after a contested
hearing, or by mutual agreement of the parties. The order may
be approved by the pension plan as a draft to save you court
costs and attorneys' fees, but your rights are not protected
and you will not receive anything under the State court order
until and unless the final order has been signed by a judge
and accepted by the plan.
Why
should I get a QDRO now?
If you delay in obtaining a QDRO, you may lose valuable
rights and run the risk of forfeiting all of the benefits.
Your rights may be lost if your former spouse does any of the
following before your QDRO is submitted to the pension plan:
- retires
- becomes disabled
- remarries
- dies
- quits or is fired
- withdraws funds from the plan before retirement
- takes our a loan from the plan |
