The QDRO Process from Start to Finish

If dividing marital assets involves splitting a retirement account or two, you’re going to need the court to sign off on a Qualified Domestic Relations Order (QDRO). However, these potentially complex legal documents often confound and confuse even the savviest divorce lawyer or client.

There are five basic steps to acquire a valid QDRO.

Step 1 - Collect Information

A valid QDRO begins with basic – but required – information, including biographical data about both spouses (names, current addresses, social security numbers). Likewise, a copy of the relevant divorce paperwork (the Divorce Decree or Separation Agreement) is also required, so the person drafting the QDRO knows how the qualified retirement account(s) should be divided. Finally, information related to the qualified retirement plan itself will be needed, including contact information for the plan administrator, the Summary Plan Description and Written QDRO Procedures.

Step 2 - Draft the QDRO

Once all this information is received by the QDRO professional, he or she is ready to prepare the draft QDRO. The completed document you receive will vary by name, depending on the type of retirement account that is being divided.

Qualified Domestic Relations Order – To divide qualified retirement plans.

Transfer Incident to Divorce – To divide IRA accounts.

Qualified Court Order – To divide military retirement pay

Court Order Acceptable for Processing – To divide FERS/CSRS retirement plans

Retirement Benefits Court Order– To divide federal thrift savings plans

Each of these documents is broadly referred to as a QDRO.

Step 3 - Approval of the QDRO by the Plan Administrator

Once both parties to the divorce agree to the contents of the draft QDRO, the draft is sent to the retirement account’s plan administrator for review and approval, if required. Since it is the plan administrator’s fiduciary duty to properly execute any plan-related business, he or she will review the proposed QDRO for absolute compliance with the plan requirements. In about half of QDRO cases, the plan administrator will require minor modifications to the QDRO. These changes are administrative and don’t usually affect the amounts in question.

Some types of plans – military and federal service pensions and some corporate plans – do not require pre-approval of the plan administrator, so this step will be skipped.

Step 4 - Signature of the Judge or State Divorce Court

Once the plan administrator signs off on the draft QDRO, a final copy is prepared. Each party must sign it (along with their respective attorneys) and it is then submitted to the court for signature, at which point the QDRO becomes a binding court order.

Step 5 - Submit a Certified QDRO to the Plan Administrator

Once the court signs off on the final QDRO, a certified copy must be obtained and forwarded to the plan administrator. The plan administrator will then issue final approval, acceptance and payment of benefits to the alternate payee named in the QDRO. This usually happens very quickly, especially if the plan administrator already pre-approved the QDRO.

To learn more about QDROs or the many related services we provide, please visit our website.