Qualified Domestic Relations Orders (QDROs)
A Qualified Domestic Relations Order (QDRO) or a Domestic Relations Order (DRO) is a court order directing a retirement plan administrator to distribute a portion of one party’s retirement to another. Implementing a judgment of divorce or legal separation can be tedious as the intent of the distribution needs to conform with the rules of the particular retirement plan. Our attorneys regularly deal with many issues on retirement distribution, most often at the stage of an agreement or an initial court order but also through the implementation of an agreement or order.
There are essentially two types of retirement assets:
- A defined benefit plan, which is typically referred to as a pension, involves a monthly payment to a retiree, the amount of which is based upon a percentage usually of a certain number of years of service.
- A defined contribution plan, on the other hand, is similar to a 401(k) or a 403(b) Plan, where monies are invested on a pre-tax basis, invested and, hopefully, grow.
The division of a defined benefit plan involves considerations beyond the basic amount upon retirement, including pre and post-retirement death benefits and survivor benefits, which vary by plan and need to be addressed in some fashion in a divorce or separation.
When dealing with defined contribution plans, particular attention needs to be paid to how the share of the non-titled spouse is to be calculated and whether it is to be impacted based upon the appreciation or depreciation of that particular portion of the account until the date of distribution.
HoganWillig has a team of attorneys highly skilled in drafting Qualified Domestic Relations Orders. We understand the intricate details these documents require and have prepared numerous QDROs for clients over the past 20+ years. If you have a case nearing settlement, call one of our QDRO attorneys today for assistance in the division of retirement plans of any kind.