A qualified domestic relations order (QDRO) is common in divorce cases, especially when dealing with division of pensions. There are quite a bit of items that must be addressed in a QDRO in order to protect all parties involved. The items that must be addressed are universal and were outlined by Congress when dealing with a payee and his or her rights.
The plan administrator is required to notify any person affected by a QDRO immediately upon receipt of the domestic relations order. All alternate payees named in the order must also be notified by the administrator. All people affected must be provided with copies of the plan’s procedures as well.
The procedures of a QDRO must be in writing, must be reasonable, that each person named as a payee or alternate payee must be notified of the procedures and allow for a designated person of each alternate payee to receive the procedures, if necessary.
The procedures of a QDRO must address the following:
— A time limit set forth by the administrator for making determinations.
— A description of the process necessary to acquire explanation for reviewing the administrator’s determination.
— Descriptions of the steps the administrator will take to protect the retirement assets and benefits when he or she receives the domestic relations order.
— A thorough explanation of the information in the plan and its benefits.
A plan administrator only has a reasonable amount of time to determine if a domestic relations order is in fact a valid QDRO. The reasonable amount of time is different from case to case and based on the specifications and complicated matter of each individual plan.
If an administrator deems a domestic relations order is not a QDRO, he or she must provide the following:
— Explanation why it is not a QDRO.
— Explanation of time limits for each party’s available rights to benefits.
— Plan provision references.
— Descriptions of any additional information, material or modifications to be made with the QDRO.
Source: Department of Labor, “QDRO’s – Determining Qualified Status and Paying Benefits FAQs,” accessed April 13, 2017