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QDRO: Allocation of earnings and losses


Guest CRMowery
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Guest CRMowery

Our record keeper has informed us that they cannot allocate earnings and losses from the date of division, e.g. date of divorce or date of separation, to the date of allocation. They indicate that few plans will allow this, but require that no earnings or losses be allocated. Does your plan allocate earnings or losses? or do you not accept dro's which allocate earnings and losses?

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Guest RARogers

I think what your recordkeeper is saying is it can't determine "actual" earnings. If you have a daily plan, would it go back and reconstruct accounts as if the money had been set aside at the separation date (maybe doable but a lot of work)? If you have a balance forward plan, how would it determine earnings for part of the allocaion period - what if there was a big gain in the first part of the period and a big loss that offset the gain in the second half - would you give the alternate payee the loss?

If the order either specifies the earnings amount (say a dollar amount), or specifies a method to determine earnings (such as average daily earnings for the period x # of days from separation to allocation date), the order would have to be followed (unless it violated state rules).

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