QRDO

 

What is a (Qualified) Domestic Relations Order?

The terms  “Qualified Domestic Relations Order” (QDRO) or “Domestic Relations Order” (DRO) are types of orders used to divide retirement plans during a divorce. These orders assign an alternate payee (spouse, former spouse, child, or dependent of the employee) the right to receive all or a portion of the benefits payable with respect to an employee or participant from a plan. 

Retirement accounts are typically one of the largest assets being negotiated in a divorce. Do not make a costly mistake in your divorce. Before you finalize your divorce, you should have the domestic relations order approved by the plan to avoid going back to court to modify the final judgment. Ultimately, the plan approves or denies the order, so the judgment for divorce must be aligned with the plan’s requirements. 

Some of the most popular retirement plans today: 

Plans that require a QDRO or DRO are: 

•401(k) , 403(b), and 457 plans

•Profit Sharing Plans 

•Money Purchase Pension Plans 

•Employee Stock Ownership Plans (ESOPs) 

•Savings Plans

•Pensions  

•Cash Balance Plans

•Savings Plans

Plans that do not require a QDRO or DRO are Individual Retirement Accounts (IRAs) which include:

•Traditional IRAs, Rollover IRAs, or ROTH IRAs

•Rollover IRAs

•ROTH IRAs

•Employer provided Simplified Employee Pensions (SEPs)

•Simple IRAs. 

See exactly what items are needed for the QDRO & DRO process.