Copyright © QDRO Professionals, LLC 

1 Carriage Lane

Building I, Suite 202

Charleston, SC 29407

(p) 843-779-5664​

(f)  864-673-0283

E: info@qdroprofessionalsllc.com

What Attorneys need to know about QDROS

The QDRO process can take anywhere from one month to over one year to complete, depending on the facts of the particular case and the Plan.  As an attorney, the first, most important step is for you to gather all plan documents for each and every retirement asset involved in your case, both for your client and the other party.  You can send a simple letter to the Plan Administrator at the beginning of your case requesting: (1) Summary Plan Description, (2) Written QDRO Procedures, (3) QDRO Model Language, and (4) recent benefit statements of the Participant.  This information will be helpful in understanding the benefits available and how they can be divided.  It is very important, before you finalize any Agreement, to determine if the retirement plan allows for lump-sum distributions or any distributions whatsoever prior to the Participant's retirement.  Most Agreements are negotiated with one spouse thinking they will have immediate access to assets, which is not always the case when dealing with retirement assets.

When drafting your Agreement and/or Court Order, it is very important to include or address certain issues.  It is also important to be specific, but not overly specific (if that makes any sense).  Here are some tips to think about when drafting your Agreement/Order:

  1. Are you agreeing to give Alternate Payee a specific amount or a percentage?
  2. ​Is there a valuation date (i.e. a cut off date when the assets are to be valued)?
  3. If a specific amount, does it include interest, dividend, gains and losses on Alternate Payee's share from the valuation date until the date he/she receives benefits?  If so, you must identify a valuation date (date of filing, date of separation, date of divorce, etc.).
  4. If you agree to a percentage, what is the valuation date (date of filing, date of separation, date of divorce)?  Does it include interest, dividends, gains, and losses on Alternate Payee's share from the valuation date until the date he/she receives benefits?
  5. If you use a coverture fraction, specify the following dates (date of marriage, date Participant started working for Plan, date of last employment or cut off date/valuation date) DO NOT just say Alternate Payee is entitled to 50% of the "marital portion" of Participant's retirement!  While this may sound clear, it can be misleading.  Only use coverture fraction for Defined Benefit Plans.
  6. Who is responsible for any loans on the assets?
  7. ​What happens if Alternate Payee dies before receiving any benefits? Do they revert back to Participant?
  8. What happens if Participant dies before retirement?

          (a) is Alternate Payee treated as surviving spouse for QPSA?

          (b) for federal civil service plans (FERS/CSRS) is Alternate Payee entitled to FSSA?

          (c)  for military pension, is Alternate Payee (former spouse) entitled to SBP?

       ** Failure to expressly provide for survivor benefits for your Alternate Payee clients at trial or in a stipulation or separation agreement can be fatal to your ability to include them in a subsequent QDRO if the Participant or his/her lawyer objects.

If you have any questions about what to include in your Agreement or Final Order, feel free to contact us!

QDRO Professionals, LLC

1 Carriage Lane, Building I, Suite 202, Charleston, SC 29407

(p) 843-779-5664  (f)  864-673-0283

E: info@qdroprofessionalsllc.com