In a dissolution matter involving retirement accounts, a Qualified Domestic Relations Order or “QDRO” is required. This is an order in addition to the Judgment of Dissolution required for the divorce. The QDRO orders the retirement plan to transfer or divide the retirement benefits to the non-employee spouse pursuant to the Judgment of dissolution. Such transfer won’t occur until a certified QDRO is approved and received by the plan.
The non-employee spouse is often referred to as the alternate payee, who will receive benefits from the retirement plan. The employee in whose name the plan is held is called the participant.
Depending on the type of plan and how the assets are held, the plan may offer different options as to how to divide the assets. Sometimes, the assets will be separated into a separate account for the alternate payee. Other times, the alternate payee will receive a check each month upon the participant’s retirement as their portion of the account.
As the plan requirements for the orders are often stringent, it is common to have a specialist attorney, actuary, or service draft the QDRO. This helps ensure that the plan’s requirements are satisfied so the plan will approve and follow the order.
Most plans require that the order be certified by the court, which is something the court clerk does, and requires an extra fee. The court will stamp the copy as conforming to the original order in the court’s file.