QDRO: Distributions before QDRO determination

[Guest RWC]

If QDRO procedures are silent on this issue, when would a plan administrator be permitted to honor participant requests for permissible withdrawals/loans/distributions pending QDRO determination? The DOL publication indicates a separate account should be set up for an alternate payee upon receipt of a DRO. What if the plan administrator gets a request in writing for employee information (e.g. subpoena) with the stated purpose of preparing a DRO?

[QDROphile]

If you read the statute literally, it is business as usual until a domestic relations order is received (not a draft, an order). And so says the Schoonmaker decision, 987 F2d 410 (7th Cir. 1993). But read Schoonmaker very carefully. It suggestst that the written QDRO Procedures are very important.

My experience with the DOL is that the DOL wants the would-be alternate payee to be "protected" as soon as there is information that suggests a domestic relations order may be coming. But that is a very problematic standard, and Schoomaker says not to do it unless maybe the QDRO Procedures provide for the earlier protection. Maybe.

And then be careful about what constitutes a domestic relations order (not necessarily a qualified one) and the protection it offers an alternate payee. See the Tise decision, 234 F3d 415 (9th Cir 2000).

So the real answer is beef up those QDRO Procedures and follow them. And everything we know is wrong in the sovereign nation of California.

[Kirk Maldonado]

I've been through this thicket many times and my advice to you is to retain competent ERISA counsel ASAP.