9097 / What is a qualified domestic relations order (QDRO) and how can a QDRO impact an individual’s retirement benefits?

A plan may distribute, segregate, or otherwise recognize the attachment of any portion of a participant’s benefits in favor of the participant’s spouse, former spouse, or dependents without violating the restrictions on alienation of benefits ( Q 3912) only if such action is mandated by a QDRO.¹ Only a spouse, former spouse, child, or other dependent of a participant may be classified as an alternate payee under a QDRO.

The following requirements must be met for a domestic relations order (“DRO”) to be qualified:

(1)   it must relate to the provision of child support, alimony, or property rights to a spouse, former spouse, child, or other dependent;

(2)   it must be made under a state’s community property or other domestic relations law;

(3)   it must create, recognize, or assign to the spouse, former spouse, child, or other dependent of the participant the right to receive all or a portion of a participant’s plan benefits;

(4)   it must clearly specify the names and, unless the plan administrator has reason to know them, the addresses of the participant and each alternate payee, the amount or percentage of the participant’s benefit to be paid to each alternate payee (or a method for determining the amount), the number of payments or the period to which the order applies, and each plan to which the order applies; and

(5)   it may not require the plan to provide any type or form of benefit or benefit option not otherwise provided under the plan, to pay increased benefits, or to provide increased benefits to an alternate payee that are required to be paid to another alternate payee under another previously ordered qualified DRO.²