A Qualified Domestic Relations Order (QDRO) is a judgment, decree or order for a retirement plan to pay child support, alimony or marital property rights to a spouse, former spouse, child or other dependent of a participant (i.e. alternate payee). A QDRO can be part of a Judgment of Divorce if it contains the required language; however, typically such order is separately drafted and entered into the Court.
In order to be qualified, the order must meet several requirements. For example, it must specifically state the retirement plan name, list the affected parties and their addresses along with the amount or percentage of the participant’s benefits to be paid to each alternate payee. The QDRO may not award an amount or form of benefit that is not available under the plan.
Many other factors must be considered when reviewing a QDRO. The Defined Contribution Plan QDRO Requirements Checklist can help you determine if the QDRO you received is acceptable and additional information can also be found on the IRS website.
Since it’s critical for a QDRO to meet all requirements before a benefit is paid out, Watkins Ross provides a QDRO review service for our clients. Please contact Watkins Ross associate if you have questions or would like us to review a QDRO you received.