QDRO earnings calculation

[Guest DAS]

Looking for help in trying to understand how earnings are being calculated for my QDRO. The Plan Administrator is only reachable for inquiries via a letter or fax. So looking to try and understand asap so I can get some sleep tonight.

The QDRO stated the alternate payee (ex-wife) is entitled to $96,869.62 as of 05/09/2012, plus earnings, or minus losses. The amount that was transferred to the alternate payee was $134,090.40 as of 08/21/2014. My 401K account earned roughly 7% from 05/09/2012 - 08/21/2014. So trying to understand how the earning was calculated at $37,220.78.

[Lou S.]

Send them a fax asking them to provide details of the calculation.

Not sure what you are invested in but the S&P 500 has more than doubled in that time period (roughly 909 -> 2003) so the earnings don't seem crazy to me. Are you sure the 7% return figure you are quoting is accurate?

[QDROphile]

I bet that your plan administrator does not know. The plan administrator relies on a financial services provider, such as a mutual fund company (think Vanguard, T. Rowe Price), insurance company, or other provider (Flying Spaghetti Monster forbid, ADP) perform the calculation based on the instruction to compute related earnings. The financial services provider has a methodology that is usually some sort of algorithm. It would be good for the plan administrator's soul to understand and explain the methodology and break it down for you with actual numbers applicable to your account. You can frame your inquiry as a claim under your plan's claims procedure if the plan administrator is not forthcoming informally.

[jpod]

The S&P has not doubled in the past 27 months. Maybe +40%, but not doubled. Ironically, however, 40% would just about get you $37,000 and change.

[GMK]

DAS - Check how much your share of the account went up.

As of 5/9/2012, your portion was the account balance minus $96,869.62. After the transfer on 8/21/2014, how much was left in your account? Was it about 38% more than your 2012 portion? If not, then either your portion wasn't invested the same has hers, or the calculations should be checked.

[Lou S.]

The S&P has not doubled in the past 27 months. Maybe +40%, but not doubled. Ironically, however, 40% would just about get you $37,000 and change.

Thanks for some reason I'd read it as 5/12/09 not 5/09/12. My bad.