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For an ERISA-governed individual-account retirement plan, when an alternate payee may get a QDRO distribution goes like this: A plan must allow a QDRO distribution if the participant is entitled to a distribution under the plan. A plan must allow a QDRO distribution on the later of the participant’s age 50 or the earliest date on which the participant could begin receiving benefits under the plan if the participant separated from service. ERISA § 206(d)(3)(E), 29 U.S.C. § 1056(d)(3) http://uscode.house.gov/view.xhtml?req=(title:29%20section:1056%20edition:prelim)%20OR%20(granuleid:USC-prelim-title29-section1056)&f=treesort&edition=prelim&num=0&jumpTo=true A plan may provide an alternate payee’s QDRO distribution before the plan provides a distribution to the participant. 26 C.F.R. § 1.401(a)-13(g)(3); https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401(a)-13#p-1.401(a)-13(g)(3) Whether an individual-account plan provides a QDRO distribution before the participant’s earliest retirement age is a plan-design choice.

FWIW - I love these message boards! I try to guess at the answer before clicking on the links in the email - and my memory served me well today. A big thank you to everyone who contributes!

Building on what Peter has said, in addition, you need to pay particular attention both to what the order says involving distribution as well as the terms of the plan document in determining whether and when an alternate payee may receive a plan distribution.

I often advise employers to be careful about intentionally limiting an employee’s work hours to prevent the employee from becoming eligible for health plan coverage. That strategy has potential legal risk under ERISA §510.

And of course the client thinks that WE did something wrong.

Possible, sure. Advisable, I'll leave that up to you.

An immediate lump sum to the A/P of a QDRO in such instance is only allowable if (1) the QDRO calls for it and (2) the plan allows for it. DB plan documents can allow for QDRO payouts of any amount at any time (but lump sums would be subject to any 436 or top 25 HCE restrictions), regardless of whether the participant is eligible for a distribution. Our pre-approved plans have that as a checkbox option.

1. Yes, NMSNs are an automatically qualifying standardized form of QMCSO. 2. If the employee is not currently enrolled and there are multiple plan options available, the employer will complete Response 3 to notify the issuing agency of those available plan options, and which option the employee and child(ren) will be enrolled in by default if the issuing agency does not respond within 20 business days selecting a specific plan option. It generally makes sense to rely on the lowest-cost plan as the default coverage for these purposes because the employee will be required to pay the employee-share of the premium for such coverage. 3. The Section 125 permitted election change event that applies here (Treas. Reg. §1.125-4(d)) addresses only enrollment of child(ren) subject to the order. I'm not seeing any basis for enrollment of the spouse. 4. If the employee is not already enrolled, DOL guidance and the NMSN instructions confirm that the NMSN will require the employer to enroll both the employee and the child(ren) to provide coverage. Lots more details here if you're interested: https://www.theabdteam.com/blog/employer-responsibilities-upon-receipt-of-a-nmsn/

Peter, as a Vanguard individual and retirement plan customer I did receive a notice of this impending change but no action was required on my part.

Stolen from a similar post on the COPPA Board, but I thought it was appropriate: The IRS has made me remove the Circular 230 notice it formerly made me put here. Under penalty of law you may not rely on, and no inference may be drawn from, the fact that I have deleted the Circular 230 notice the IRS used to make me put here but has now told me not to put here. Further explanation of this notice of non-notice is available at my usual hourly rate. Personally, I never put it on anything in the first place because I thought it was stupid. But that is just the rebel in me, I guess. It is nice to know the rest of the professional world has come around and realized it.