Understanding QDROs: Dividing Retirement Plans in Divorce

In short, Qualified Domestic Relations Orders (QDRO’s) are often used in a divorce proceeding to serve two functions:

– divide retirement benefits earned during marriage and/or a registered domestic partnership; and
– allow payment of child or spousal support from an employee’s retirement benefits.

What is a QDRO?

A QDRO, as stated above, is a Qualified Domestic Relations Order. To be deemed “Qualified”, the domestic relations order must recognize the right of a non employee spouse to receive all or a portion of the benefits payable to the employee spouse. QDRO’s must be very specific, including (among other things)

– the name and mailing address of each ‘alternate payee’ (the spouse who was not the employee that earned retirement benefits through her/his employer);
– the amount or percentage of the benefits that will be paid to the alternate payee (or a formula detailing how the amount will be determined); and
– the number of payments that will be provided or a time period to which the order applies.

A QDRO may NOT provide that the non-employee spouse receive a benefit not otherwise provided by the retirement plan.

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