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My pooled 401k plans are run on a recordkeeping system, ASC. I have multiple sources, including Roth, while using one pooled investment trust. The recordkeeping system tracks the sources, contributions, and earnings.

Artie M. and Paul I, thank you for helping me. That a person is highly educated or is a knowledge worker (or is both) doesn’t always mean one knows how to select investments. Or, someone who does know might choose, whether rationally or otherwise, not to put one’s time on that activity. Moreover, even if 99% of the participants deliver affirmative investment directions, a plan’s fiduciary might set a default for the 1% who don’t. And should have a reasoning for the default one sets. In my not-so-hypothetical, the fiduciary that selected the menu of designated investment alternatives also is the fiduciary that must decide the default investment. The target-year funds’ investment strategy described above is from a disclosure for the Vanguard Target Retirement Trust funds. Those funds’ disclosures don’t say ‘this fund is for someone who will turn 65 (or some other age Vanguard assumed) in or near the target year.” Rather, Vanguard says: ‘The fund invests according to an asset-allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 20yy (the target year).’ If an individual affirmatively directs investment, the individual may decide her guess of when she expects to leave the workforce. But for a default-invested participant, the plan’s fiduciary must form its estimate or assumption. If the fiduciary that decides which target-year fund in the set is a participant’s default assumes that the collective trustee’s description of the funds is truthful, I’m imagining it might be prudent to follow that description’s logic. While that way is not the only way to meet 29 C.F.R. § 2550.404c-5, it at least has an explainable logic. And all it asks of the default-deciding fiduciary is to form a reasoned guess about when a typical default-invested participant leaves the workforce.

Why? What is your relationship to the plan? To the parties? Do you know whether the divorcing parties expect to include any particular assets (in this case, the 401k accounts) in their asset division? Even if you do know, is it any of your concern? Is it possible the parties will find ways to simplify asset division by ignoring some? Is it possible both accounts are small enough so as to be trivial? (BTW, these questions might be inter-related.) I'm not really asking you for answers, just pointing out that the plan (and its administrators) should stay out of the legal proceeding. It seems likely the QDRO procedures direct you to act on a (draft) DRO only if you get one. Alternatively, if your QDRO procedures direct you (or someone) to speak up (or take any specific action) whenever you hear about a potential divorce of a plan participant, then you should quickly engage an ERISA attorney to help you correct that.

I don't know the answer to your questions but if my participants are highly educated knowledge workers, why are they leaving their moneys in a QDIA and not investing the moneys where highly educated knowledge participants would otherwise invest the funds? My experience with clients with these types of workers is that those workers are usually screaming for self-directed brokerage accounts and alternative investments and playing at being day traders. I guess I would be more worried if my participants are less educated unsophisticated workers, in which case the longer employment horizon may be more applicable. Sorry I didn't read all the comments etc. but just spewing my thoughts as I am going out the door....Have a nice weekend!