Delayed QRDO filing

[oldgoat]

Let's say that a divorce is final in 2014. The decree states that 50% of the petitioner's 401k account shall be awarded to the respondent. The value of the 401k account at the time the decree was signed was 400,000. It is now 2.5 years later, and the QRDO is still not filed. The 401k account of the petitioner is now 510,000. Is the respondent entitled to half of 400,000 or 510,000? How much time can pass before the QRDO must be filed? Will the respondent ever be entitled to more than 200,000?

[CADMT]

1. It depends on what the court order said. Does the order state 50% plus or minus gains and losses or just 50%. If it is simply 50% then it is half of $400K.

2. There is no time limit for filing the QDRO. But obviously if the order states 50% without gains, then the alternate payee is losing money by not filing a DRO ASAP.

3. See item 1. It depends on what the JOD or SA says.

[oldgoat]

Thank you for your input. The divorce decree says 50% and makes no mention of gains or losses. If I were the payor, I guess I would sit and watch the earnings grow....

[david rigby]

"It depends on what the court order said."

Caution: from the plan's viewpoint, it depends on what the QDRO says, not the divorce decree and/or property settlement agreement.

[fmsinc]

Is this still an open issue? If so, read the attached Memo re: Gains and Losses. I suggest that they are implicit.

David GoldbergGains and Losses Excerpt 10-29-15.pdf

[david rigby]

Another potential confusion: usually a division of account will exclude any EE contributions/deferrals/PS additions that occur after a particular date (for example, date of separation). The original post makes no mention of that, so the parties should proceed carefully; if ambiguous, the record-keeper should not make the decision.

[GMK]

Follow Mr. Rigby's advice.

Further, the Plan Administrator holds the reins, the tiller, whatever. The Plan Administrator decides if the DRO is qualified.

If there is an ambiguity in the DRO or if a needed factor is not specified, the Plan Administrator can send a letter to all parties stating how the Plan will treat the ambiguous or missing parts, subject to the parties' agreeing to the points in the letter. Some will say that the Plan Administrator should not get involved and should simply reject the DRO as not being qualified, but sometimes the process moves along faster if the Plan says here's the problem and here's how we are going to do things if all of you agree. (And some of us PA's prefer not have DRO's hanging out there for an extended period of time.)

If the parties do not agree on the points in the letter, then the parties can try again to generate a DRO that eliminates the ambiguities, so that DRO is qualified and fully instructs the Plan Administrator on how to do the division of the account (within the rules governing QDRO's). At that point, I'd leave it entirely up to them to work out the necessary details.

[MsRose]

"The Mother shall receive 50% of any and all of the Husband's pension to include any passive earnings and cost of living adjustments on said amount as of the date of filing until the date of disbursement".

What does this mean exactly?  I see a lawyer today about filing a DRO.  My ex changed jobs last month.  Will that have an impact?  What restrictions are implied or stated above.

Thanks!