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Does my share earn interest until the QDRO is signed?


Guest waitingonhim

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Guest waitingonhim

Got a judgement for divorce that required the QDRO for my ex's retirement fund be carried out within 45 days. That day came and went and I've now filed for contempt. I'm due to receive 50% of the fund during the marital coverture period.

It's a substantial amount of money and what I can't seem to find an answer to is this:

Is the interest being earned now on 100% of the money ALL going to him, or will I receive interest on the portion that was deemed to be mine by the court? I want to know if I need to ask the court for financial damages due to him dragging his feet. I calculated that even at a modest interest rate of 4% compounded weekly, I'm losing about $800 a month.

Does anyone know the answer?

Thanks in advance!

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Guest waitingonhim

So if there's no language in the court document about how the QDRO is drafted, should I assume that I can insist on that language? Are there any standard terms or is just whatever the parties agree to?

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You can request a copy of the retirement plan's QDRO procedures, which may (or may not) provide useful information.

Unfortunately, it will not answer questions about how to word a QDRO, which you might want to have done by an attorney who understands QDRO's. If you get a draft from your ex, have a QDRO lawyer look it over to confirm that it does what the divorce judgement specifies. And look for wording like Lou S. suggested. That's a pretty common phrase in a QDRO.

Keep in mind that if you and your ex agree to the wording presented to the judge (whether you understand it or not), the judge will probably sign it (unless it's way different from the divorce decree) . Then, what it says is what you'll get, assuming it conforms with the retirement plan's basic rules.

Good luck.

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The original post implies, but does not state, that the plan is a defined contribution plan.

The advice above is good if it's a DC plan, but additional issues might apply if it's a Defined Benefit Plan.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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Whether or not your share earns interest from the cutoff date (typically the separation date) until the date of distribution depends on the wording of the stip or judgment of divorce. The if there was a stipulation that you would earn interest on the marital portion then the plan can still provide the information on the gains and losses from the cut off date until the date of distribution and you would have your agreed upon share. Remember a QDRO is an order directing the plan to divide an asset. The settlement agreement/judgment of divorce should contain the information necessary to draft that QDRO. So check your stip/jod to see if you were awarded gains and/or losses from the cut off date until the date of distribution. You do not have to wait for your ex to draft a QDRO. You can have it done and present it to the court (through your attorney unless you are appearing pro se) and have the court sign it. As long as the QDRO conforms to the SA/JOD the court should not have a problem.

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Guest waitingonhim

Thank you all for the responses! I actually have begun the process, but I'm stalled at the point where the attorney needs the plan information. I don't have that. We didn't have any specific wording in the agreement about gains/losses, just that I was to receive 50% of the account for the marital coverture period... which was the entire fund. The QDRO attorney seems to think we can include gains/losses but it remains to be seen, I'm really hoping so with the recent stock market action and since my share is over $200,000 there could be some substantial gains!! I appreciate the input and help in asking the right questions! :)

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In my experience, it's pretty standard, when divvying up the account that if it's a percentage as of a specific date and not a flat dollar amount, then earnings (good or bad) from the date are usually included.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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If the agreement said that you were "to receive 50% of the account for the marital coverture period" that account balance will include the gains and losses. Whether you receive gains/losses from the cut off date until segregation or distribution depends on whether that was explicitly identified in the agreement OR whether the judge decides it was or should have been. It sounds to me like this is decision to be made by the court (subject to arguments by both attorneys). Remember Family Law is an oxymoron. A lot depends on how the judge views things.

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