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An attorney should review your qualified domestic relations order

This second installment in our two-part series on retirement benefits takes a closer look at qualified domestic relations orders. QDROs can be an efficient way to satisfy alimony, child support or property division obligations in a divorce.

When a court issues a QDRO to a pension plan, the plan administrator will be looking for certain information. A QDRO should also contain all of the information needed to allow the plan administrator to make payments. That information includes the beneficiary’s name and address, the payment amount, and the timing.

However, a QDRO cannot force a plan administrator to make a payment that would not otherwise be allowed under the plan. For example, if the employee would not be allowed to withdraw his or her pension in a lump sum or single payment, neither can the beneficiary listed in the QDRO.

Many retirement plans have their own QDRO forms, which can be a time saving measure for the parties and the court. However, our divorce law firm recommends that an attorney review these QDRO forms to ensure that a party’s full rights are being protected. An attorney can also look for commonly overlooked issues, such as the valuation of the plan.

For example, a couple might deem it easier to trade other assets, such as the family home, in exchange for not dividing up a spouse’s pension. Take care, since an individual’s share of the spouse’s pension should be valued to ensure that the tradeoff is fair. Many plans also offer a survivor’s pension, in addition to the retirement payments. However, the plan may also require that benefit to be separately requested in a QDRO.  

Source: “QDROs: The Division of Retirement Benefits Through Qualified Domestic Relations Orders,” copyright 2014, U.S. Department of Labor

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