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Termination before retirement


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Hello Perplexed,  the short answer is nothing really changes.  Still need to make sure it's filed with the court and accepted by the plan, etc., but termination does not necessarily change anything.  Specifics depend on the type of plan (defined contribution vs. defined benefit) and if the participant was vested in the plan at the time of termination, but assuming there is a vested account balance or accrued benefit then the QDRO can/will still apply.

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If the employee has a defined contribution plan (like a 401(k)), a QDRO can still be obtained from the Court ordering the Plan to pay a portion of the employee's plan account to the former spouse.  But if the employee has been terminated and can remove all the money in his defined contribution plan account without notice to or consent by the former spouse, then you will have a collection problem. 

If you are dealing with a defined benefit plan, a pension, and the employee has sufficient time in service to be vested and still entitled to a pension, then then a QDRO can be obtained to award a share of the pension to the former spouse.   

You need to expand on your factual presentation if the foregoing does not answer your question.   

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You really need to check your plan's QDRO procedure.   Some of them will have rules that say if you have been given notice there might be a DRO on the way you are to put a hold on the account.   Leaving aside the strong opinions on this board that object to such procedures if it is there you have to follow it.   If it isn't there and the person asks for the benefit I don't think the plan can say "no".  

This answer to this is most likely answered by the plan document and QDRO procedures.    

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To follow up on ESOP Guys comment..you could also submit your Judgment to the plan as the QDRO which they will almost certainly reject.  But that should put an administrative hold on the account giving you time to perfect the actual QDRO.  I have seen that done in the past.  If a CA plan then you can file a "joinder" but they are not required to accept it..but many do!

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