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QDRO earnings/(loss) calculation


Guest Achilles

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Guest Achilles

I have a QDRO, determination date of 9/30/02.

This week I plan to do the money movement.

The QDRO I have specifies the amount to move, but it also states that the alt. payee is entitled to earnings or (loss) on the portion of such amount accruing after the determination date.

I take this to mean that the alt. payee's amount could increase or decrease, based on earnings, realized & unrealized, in the current participant's account.

Is there a standard method for calculating this amount?

If the alt. payee is receiving, for example, 67% of the participant's acct. balance (this includes a loan balance), should the alt. payee share 67% of the earnings - even if it's a loss?

Thank you in advance!

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The short answer is "yes" the AP should share in the loss.

Keep in mind that it is the loss on the monies as of 9/30/2002, because if there have been new monies deposited since thn, the loss or gain on that money belongs solely to the participant.

Also, you might want to make sure that the loan can be properly split. I have run into cases before where the loan is intended to be split, but the loan policy for the plan requires that loans be repaid through payroll withholding. Since an AP can't do that, you are essentially providing an alternative to an AP not available to the participant (having a loan that isn't repaid through payroll). That is a problem.

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