QDRO Clarification Letter?

[Lisa7267]

Does anyone know if the award instructions in a QDRO need to be clarified (e.g., the parties' intent regarding how to treat the loan balance, to include it or not in determining the balance), can the two divorcees submit a letter with both signatures?

 

[david rigby]

Just my opinion: if a DRO needs to be "clarified", it should not become a QDRO. 

But, perhaps there are other issues or practicalities?

[jpod]

I have had many situations where there was too much room for interpretation of certain provisions and the matter was settled by a letter signed by both parties, or their attorneys, confirming a particular interpretation.  I don't have any concern that this approach would put the plan's qualified status at risk.  This is to be distinguished from a situation where a material element is completely omitted from the DRO.

[QDROphile]

There are different approaches to determining the terms of an order.  In the end, the plan administrator (or special fiduciary) has to adopt an interpretation of the order and decide qualification and administration accordingly.  If the plan administrator wishes to base the interpretation on some agreed assistance by the interested parties, that should be acceptable as long as the PA adopts the interpretation and the interpretation is reasonable.  Many PAs will not take this approach and even a provision in the order that says the parties may agree on terms cannot require the PA to accept an outside interpretation.

[ESOP Guy]

I am with david if I have to make such an interpretation I question if it is a QDRO vs a DRO.   This is why I urge my clients to urge their people to submit drafts of the DRO to see if we have issues that can be cleaned up before they go before a judge and it is final.  I understand why people are reluctant to do that.

Since it sounds like your past the draft stage the above might not be helpful.  We have accepted letters from both parties (we like to have some evidence their attorneys bless the whole affair) to clarify how earnings or some part of the balance is to be split if it is vague.