News Archive

What You Need to Know About QDROs: Dividing Retirement Benefits in Divorce

"Understanding how QDROs work can help avoid costly delays and protect everyone's interests. This guide provides key information from the [DOL], the [IRS], and the [GAO] to help clients, family law attorneys, and retirement plan administrators navigate QDROs with greater clarity."  MORE >>

QDRO Mistakes and How to Avoid Them

"[1] Waiting too long to prepare the QDRO ... [2] Incorrect or incomplete plan information ... [3] Confusing different types of plans ... [4] Not addressing survivor benefits ... [5] Using generic templates ... [6] Ignoring pre-approval by the plan administrator ... [7] Mismanaging taxes on distributions ... [8] Forgetting to divide all plans."  MORE >>

Enforcing Fiduciary Duty Judgments Through QDROs

"A recent published opinion from California's Fourth District Court of Appeal has opened the door to using Qualified Domestic Relations Orders (QDROs) to satisfy breach of fiduciary duty awards -- even when the QDROs assign 100% of a party's ERISA-governed retirement benefits, including amounts earned after the marriage." [In re Marriage of DeBenedetti & Ensburg, No. D082801 (Cal. Ct. App. Apr. 5, 2024)]  MORE >>

Navigating QDROs and QDRO Litigation: Insights for Plan Administrators and Participants

"[A]dministrative missteps often serve as the catalyst for QDRO litigation, as affected parties seek court intervention to enforce their rights or recover financial losses. Understanding the common challenges that give rise to these disputes is key to avoiding them.... By proactively addressing potential issues and adhering to best practices, plan administrators and participants can work towards fair and efficient resolution of retirement benefit divisions.​"  MORE >>

Abusive QDRO Scheme Messes with Texans' Retirement Savings

"The General Counsel of a longshoremen's benefit fund in Texas [said] that in the last six months alone the retirement plan has received 14 QDROs for 14 different members, all following the same structure, drafted by the same attorney, and signed by the same judge.... This situation creates a huge loophole for married participants in community property states to access retirement funds prematurely, thereby putting at risk a dignified and secure retirement."  MORE >>

SECURE 2.0's New QDRO Rules: The Mainstreaming of the QLAC?

"[There is a] potential 'downstream' impact of this provision on a wide number of plan participants, legal and professionals who represent plan participants in divorce proceedings. Where there is a QLAC in a plan, this means that a wide swath of professionals of all sorts may need to be involved in sorting through this issue in resolving a domestic relations matter. Handling QLACs in QDROs may well force the whole idea of DC LI into a significant number of professional 'portfolios' as a matter of necessity."  MORE >>

SECURE 2.0's New QDRO Rules: The Mainstreaming of the QLAC?

"[Section 202(b) of SECURE 2.0] instructs Treasury to amend its QLAC rules, which are obscurely found under Required Minimum Distribution applicable to DC plans which purchase annuities (Reg 1.401(a)(9)-6).... Where there is a QLAC in a plan, this means that a wide swath of professionals of all sorts may need to be involved in sorting through this issue in resolving a domestic relations matter."  MORE >>

Divorce and Retirement Accounts: Avoiding Taxes and Penalties

"Here are tips for avoiding taxes and penalties when dividing 401(k) and IRA assets in a divorce."

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Can an Alternate Payee Designate a Beneficiary?

"The right to name a beneficiary is one such participant right that can be granted to an alternate payee, and indeed many plans grant an alternate payee the right to name a beneficiary. However, that right is limited to an assignment under a separate interest QDRO, as the payment of benefits under a shared payment QDRO is subject to the participant's elections."

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Improving the Process of Distributing Retirement Benefits Pursuant to a QDRO (PDF)

"Whether there is an uptick in plan audit and enforcement activity or implementation of increased fee disclosure requirements related to QDROs remains to be seen. Regardless, it would be prudent to revisit plan QDRO services, procedures, and communications, and to evaluate the reasonableness of related fees and fee allocations, to make any desired improvements, and ensure that the plan's QDRO procedures are compliant with applicable guidance and that the process serves the intended goals."  MORE >>

A Proposal: Simplifying the QDRO Process Through Common-Sense Disclosure Rights for Former Spouses (PDF)

16 pages. "[F]or divorced or separated spouses who have not yet procured a QDRO, the only means of acquiring ... needed documents are obtaining a subpoena or seeking assistance from the [DOL]. These unnecessarily cumbersome processes could be largely avoided if ERISA regulations were simplified[.]" [Editor's note: Attorney Emily Spreiser, former Legal Program Director for the Pension Rights Center in Washington DC, is the 2021 winner of the American College of Employee Benefits Counsel's prestigious Simplification Award for this paper. The award carries a $10,000 prize.]  MORE >>

What Women Facing Divorce Need to Know About Spousal Retirement Benefits

"[This article] explains some of the steps you should take to protect yourself and highlights potential pitfalls that can deprive you of your legal right to a portion of retirement benefits.... [T]he PRC has launched an Initiative on Women and Retirement at Divorce to bring together a range of experts and organizations to make the QDRO process easier and more efficient for everyone involved."  MORE >>

Tenth Circuit Finds Divorce Decree Is a Qualified Domestic Relations Order Under ERISA

"The court agreed ... that ExxonMobil is limited to the reasons it provided at the administrative level for concluding the Decree does not qualify as a QDRO.... The court found that ExxonMobil waived [one] argument by conceding it during the administrative review process and that [a] second argument, even if not precluded, is erroneous.... The court found that the Decree meets the second QDRO requirement of specifying the amount or percentage of benefits." [Festini-Steele v. Exxonmobil Corp., No. 20-1052 (10th Cir. Feb. 18, 2021)]  MORE >>

Text of First Circuit Opinion: Wife Not Entitled to Portion of Husband's 401(k) Plan That Government Had Garnished (PDF)

"Shilo Abell does not challenge the government's authority to garnish her husband's account in this appeal. Rather, she renews her claim that Massachusetts law gives her a vested legal interest in Edward Abell's 401(k) account. She also argues for the first time on appeal that the contingent death benefit in the plan gives her some current interest in the account. Her remaining arguments rely on this initial premise that she has a current vested legal interest in the 401(k) account under Massachusetts divorce law and/or under the terms of the 401(k) plan itself. Because we reject both of these arguments we do not reach her other claims. Nor do we reach any broader argument as to [ERISA], the Mandatory Victim Restitution Act (MVRA), or preemption." [U.S. v. Abell, No. 20-1120 (1st Cir. Jan. 15, 2021)]  MORE >>

Have Your QDRO Procedures at the Ready

"The year 2020 brought a lot of unexpected togetherness to families and couples. While there have been some positive perks to spending so much time together, it has also added additional stress to relationships. Retirement Plans should ensure they are ready in case the pandemic also leads to an increase in QDROs.... A model QDRO can be very helpful to participants while at the same time facilitating a smoother review process for the Plan administrator. "

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Retirement and Divorce: New Report Highlights What We Don’t Know

"Perhaps the most important finding [of a recent GAO report] is that very few people obtain QDROs relative to the number of people who go through divorce. This is a huge problem, because this means that a lot of people who are dependent on a spouse for retirement income are not getting a fair share of that retirement income if they divorce, even though they are entitled to a share under state law."  MORE >>

GAO Report: Retirement Security -- DOL Could Better Inform Divorcing Parties About Dividing Savings

"EBSA should explore ways to collect information on fees charged to participants or alternate payees by a retirement plan -- including plan service provider fees the plan passes on to participants -- for review and qualification of domestic relations orders and evaluate the burden of doing so.... EBSA should take steps to ensure that information regarding the requirements for QDROs is available and easily accessible for participants and alternate payees." [GAO-20-541, published Jul. 31, 2020, released Aug. 28, 2020]  MORE >>

On Determining the Qualification of a Domestic Relations Order, with Examples

"On a practical basis, it is critical that the DRO be written in a manner that permits the Plan Administrator to carry out the order without running the risk of a dispute about what was supposed to be paid to the alternate payee. Therefore, the Plan Administrator must review the DRO carefully to ensure that there are no ambiguities that could create a problem when the payments are made to the alternate payee. If there are ambiguities, the Plan Administrator may either advise the parties of its interpretation of the relevant language or ask that the parties clarify the language of the DRO."

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Approving QDROs During Court and Government Office Closures

"A plan administrator could choose to adhere to its QDRO procedures that require a certified order. But doing so has the potential to hold up payment of benefits to participants and alternate payees for an indeterminate period.... Two simple alternatives include representations from the parties -- the attorneys or the participant and alternate payee themselves -- and an independent verification by the plan administrator."  MORE >>

Estranged Couples to Fight Over Virus-Stung Retirement Funds

"QDROs that have stalled anywhere along the way in recent weeks offer no protection ... against the balance-shrinking might of tumultuous stock prices and the $100,000 in emergency withdrawals authorized by the recent stimulus bill."  MORE >>

District Court Highlights Plan Sponsor QDRO Responsibilities

"The case is particularly instructive for plan administrators of defined benefit plans in ensuring compliance with a QDRO, in light of the generally greater complexity of defined benefit plans and their related benefit calculations ... In this case, even had the District Court reached the merits of Plaintiff's breach of fiduciary claim, Plaintiff would not have prevailed, because it was prudent for the plan to ask an actuary for its interpretation of the order, and to rely upon the actuary's analysis." [Amron v. Yardain Inc. Pension Plan, No. 18-11336 (S.D.N.Y. Dec. 5, 2019)]  MORE >>

Shared Payment vs. Separate Interest QDROs

"[A] QDRO offers some flexibility in planning strategies for both the Participant and the Alternate Payee. While the Shared Payment method must be used if the Participant has already begun payments when the QDRO is implemented, either the Shared Payment or Separate Interest strategy can be chosen if the QDRO is implemented before pension benefits begin. These choices allow for more flexible planning for both parties, possibly lowering at least one hurdle for older couples who choose to divorce."  MORE >>

Sixth Circuit Affirms Denial of Attorneys' Fees to Successful ERISA Plaintiff in QDRO Dispute

"[T]he Court did not find Dr. Saghafi’s legal positions to be frivolous. He believed that the divorce proceedings were a fraud on the court. His contention that the QDROs were void was a reasonable defense to the ERISA action. Even though the Ohio courts already rejected his challenge to the validity of the divorce proceedings, the Court noted that res judicata can always be waived or forfeited." [Simonoff v. Saghafi, No. 19-3001 (6th Cir. Sept. 26, 2019)]  MORE >>

Plan Sponsors Should Have a Model QDRO

"[A] model QDRO can and should be drafted to reflect the terms of the plans that the employer maintains. This will help avoid the time consuming, costly, and sometimes frustrating process of modifying an order to make sure that it does not require a form of distribution (or confer other rights) not allowed under the plan document."  MORE >>

Military Retired Pay and Benefits Considerations in Divorce Proceedings

"[While a state] court may divide a service member's pension during a divorce action within the property division, whether by stipulation or contested trial, it must have jurisdiction over the service member and it must make specific findings and awards. This may become a significant problem when practitioners do not fully understand applicable federal law and those fact patterns governed by the FSPA."

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