Insurers Requiring QDROs for IRAs?

[Christine Roberts]

I am dividing two individual retirement annuities with two different insurance companies. Both insurance companies are requiring "QDROs" to divide the accounts. Their phone reps have never heard of Code Section 408(d)(6) and I am finding myself having to educate them as to what the Code requires for IRA divisions, versus divorce distributions from qualified plans.

Is anyone else experiencing this phenomenon?

[Appleby]

Only too often.

It is not only the financial institutions, but also some of the attorneys and other professionals who prepare or assist with the preparation of the documents. I find that a comparison of 408(d)(6) and IRC § 414(p)(1) usually resolves the issue

[Christine Roberts]

Thank you for your input. What they (the insurers, custodians, etc.) can require is a divorce decree, so where the parties only have a marital settlement agreement and no formal court order of dissolution, the insurer/custodian can hold off on dividing the account. (The problem still remains that they are not distinquishing bewteen a simple divorce decree, and the term of art "QDRO.")