QDRO for ESOP PLan after divorce

[Guest jewles47]

My divorce became final august of 2007 and 2 months ago I finally got the QDRO signed by the judge and this is in regards to my ex husband ESOP. I agreed to 40 percent and the house. Well my amount is 219.000 and my ex told me I wont get it for 3 years. My house is in forclosure and am wondering if there is any possablity of getting the money earlier or can I draw off it , I dont understand this all very much, or how do I find out where the money is at , and how I can get a hold of the administrator. I thought I would have recieved some information by now, from them.

[Guest Sieve]

You or your attorney should have had some input into the QDRO.

But, in any event, a QDRO can be drafted in many ways, including requiring the alternate payee (you) to wait until a certain time to receive payment (such as receiving payment only when your husband is eligible to receive payment under the terms of the plan). Also, the law allows a plan to limit payment under a QDRO to commencement at your husband's age 50 (if he contineus to work there). That is a plan issue, not a QDRO issue.

So, it's not really clear why distribution cannot commence immediately--it could be based on the terms of the QDRO or based on the terms of the plan. Have your attorney explain it to you--or, call the administrator of the plan (which, no doubt, would be the company--so ask for the pension or HR department at your ex's place of business where the ESOP exists).

[GMK]

jewles47 - some general information and comments for your consideration.

As Sieve says, you or your attorney should contact your ex's employer, who is the plan administrator or who can tell you who the plan administrator is.

Then, if your attorney has not already done so, ask the plan administrator (send a letter) to send you or your attorney a copy of the ESOP's QDRO Procedure, a copy of the ESOP's Summary Plan Description (SPD), and a statement of your ex's benefits and accounts. If your attorney has these documents, ask your attorney for copies.

The QDRO Procedure explains how the ESOP determines if a domestic relations order (DRO) is a Qualified domestic relations order (QDRO). The paper signed by the judge is a DRO. The ESOP then determines if the DRO meets the requirements in the law to be qualified, that is, if it is a QDRO. The QDRO Procedure also explains what information the ESOP will send to the participant (your ex) and to the Alternate Payee (you); whether the ESOP will separate your ex's account into portions for you and your ex; etc.

The SPD summarizes how the ESOP works, including how distributions (payments) can be made. One limit on a QDRO is that the QDRO cannot require the ESOP to provide a benefit that is not already offered by the ESOP. That is, the QDRO cannot require the ESOP to provide any type or form of benefit, or any option, that is not defined in the ESOP plan document. (The SPD is a summary of the plan document.) The section in the SPD that describes Distributions should make it clear why you won't get the money for 3 years. If it doesn't, ask the plan administrator, or maybe your attorney can explain it.

Be aware that the ESOP cannot give any of the account of a participant (your ex) to anyone else except under strict limits established by law. The QDRO meets those limits and gives you a legitimate claim to a portion of that account. As an Alternate Payee under a QDRO, you also have the same rights with regard to your portion of the account as the ESOP participants have with regard to their accounts (unless the QDRO lists any specific limits on those rights).

Review this with your attorney. That could be the fastest way to get the answers. And good luck.

[QDROphile]

ESOPs commonly restrict distributions. Other plans, such as 401(k) plans could, too, but generally don't. If the restriction is due to the terms of the QDRO, shame on you and your lawyer. Three years is an odd number, more than in the mathematical sense, so you should get an explanation from the plan administrator about when the benefit is payable. The employer can put you in touch with the plan adminstrtor. The employer is usually the plan administrator because the employer is usually misadvised. But that has nothing to do you with you and your QDRO.