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Documentation requirements for a person who is divorced but it is not subject to a QDRO

Guest cole24

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Two questions regarding QDROs:

1. Is a divorce decree or property settlement required for a person who indicates on their pension forms that they are divorced but it is not subject to a QDRO??

2. When a person is divorced and would like to remove his or her spouse from their account, what type of documentation do they need to provide us? (Divorce Decree or Property Settlement or both)?

Thanks for your help.

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Plan records probably show a spouse of record. In order to change that, what would the fiduciaciry like to see? Keep in mind that the fiduciary owes a duty to beneficiaries and the law requires consent to name one other than the spouse.

Now for the interesting part. You say the participant is not subject to a domestic relations order that afects the plan, but how do you know? If the plan receives a copy of the divorce decree, that is a domestic relations order. According to the plan's written QDRO procedures, upon receipt of a domestic relations order, the plan must notify the parties of receipt and make a determination of qualification. Your first impression may be that this is stupid because you don't expect the decree to be a QDRO, but in fact it is brilliant. When the plan notifies the participant and former spouse of the determination, the notice will assert that the former spouse has no interest under the plan. The former spouse will have a reasonable time to correct any misconception on that subject, as provided in the QDRO procedures. Meanwhile, the plan will restrict distributions, as provided in the QDRO procedures.

Don't have QDRO procedures that cover those points? Get them. The law requires what I just described anyway, and you have an opportunity to establish procedures and timeframes to handle what the law requires but leaves vague (such as, what is a reasonable time?).

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