Qualified Domestic Relations Orders (aka QDRO or DRO)

A Qualified Domestic Relations Order, or QRDO (often pronounced "quadro") outlines how retirement assets are distributed in a divorce.

 

At the Law Offices of Tobie B. Waxman, QDROs are drafted for one low flat fee.

 

Is a QDRO Needed for all Types of Retirement Plans?

No. You don't need a QDRO to divide Individual Retirement Accounts (IRAs), deferred annuities, or government retirement plans (military pensions and federal, state, county, or city retirement plans). 

 

You will need a QDRO if you’re trying to divide the following types of plans:

 

• 401(k), 403(b), and 457 plans

• thrift plans

• profit-sharing plans

• money purchase plans

• employee stock ownership plans

• deferred compensation plans

• tax-sheltered annuities, and

• business/corporate defined benefit or pension plans.

 

IRAs

There is no need for a joinder (pursuant to Family Code §2060) of a personally managed IRA as it is not a “Qualified Plan” as defined by the Employee Retirement Income Security Act of 1974. [aka ERISA]

 

Individual Retirement Accounts (IRA) or annuities established under Section 408 or 408A of the Internal Revenue Code of 1986, as amended, (IRC) are not qualified pension plans that have third party administrators and may be assigned and transferred to the other party pursuant to Section 408(d)(6) of the Internal Revenue Code without the requirement of a Qualified Domestic Relations Order (QDRO).

 

Why Do I Need a QDRO?

In the divorce context, the spouse that earns retirement benefits through his or her employment is called the “employee spouse” or “participant.” The other spouse is referred to as the “non-employee spouse” or “alternate payee.” Federal laws governing retirement plans prohibit certain types of plans (mentioned above) from paying benefits to anyone other than the participant, unless the plan has been directed to do so under a QDRO. In short, a QDRO allows the retirement plan administrator to pay benefits to the alternate payee.