Qualified Domestic Retirement Orders

You may be wondering what a Qualified Domestic Retirement Order is. A Qualified domestic retirement orders, or QDRO, is a domestic relations order that assigns the benefits of someone’s retirement plan to an alternate payee. In short,a divorcing couple will need to settle the property and assets in a decree of divorce. An retirement plan pension plan is an asset and a QDRO is the specific order that provides for someone other than the employee named in the retirement plan to receive part of the benefit. The alternate payee may only be a current spouse, former spouse, child, or some other dependent of a participant. If the child is a minor, then the QDRO may designated the proceeds to be paid to that child’s parent or legal guardian.

Typical Retirement Plan and Pension Plans Subject to QDRO's

• Union Pension
• Public Employees Retirement Benefits
• Defined Benefit Plans
• Defined Contribution Plans

Pursuant to ERISA § 206 and IRC § 414 there are several provision that a QDRO is required to have. The first requirement is that the QDRO contain the name and last known mailing address of the participant and each alternate payee. The second requirement is that the qualified domestic retirement order contain the name of each plan to which the order applies. The third requirement is that it have the dollar amount or percentage of the benefit that will be paid out to the alternate payee. Finally, the order needs to spell out the number of payments or the time period or payments.

Qualified domestic retirement orders need not necessarily be ordered by a divorce court. If a state agency has been granted the proper authority to issue such an order or decree, it may as long as that authority and order is issues pursuant to Nevada domestic relations laws. Ultimately, the final authority on determining what is and is not a QDRO, if such a determination is required, is the administrator of the retirement of benefit plan.

Just as there are certain requirements that qualified domestic retirement orders are required to have, there are also things that is cannot have under any circumstances. First, the order may not require a plan to provide an alternate payee or participant with any type or form of benefit, or any option, not otherwise provided under the plan. Second, it may not require a plan to provide for increased benefits. Third a qualified domestic retirement order may not require a plan to pay benefits to an alternate payee that are required to be paid to another alternate payee under another order previously determined to be a QDRO. Finally, it may not require a plan to pay benefits to an alternate payee in the form of a qualified joint and survivor annuity.

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