If you're asking the question, you or your former spouse must have pension or retirement benefits which accrued during your marriage.
QDRO is an acronym for "Qualified Domestic Relations Order." Depending on the nature of the Plan, you may also hear reference to a "Qualified Order."Expect the process to take several months.
Once the Judgment of Divorce is filed with the Court, the most torturous part of your separation is over, but there's still work to be done.
Qualified Orders are typically prepared and filed after the divorce judgment or decree is signed by the Court. They are legal documents prepared by a third party, signed by the Court and approved by a retirement plan administrator
Most family law attorneys do not draft Qualified Orders. They rely upon actuaries, accountants or attorneys specially trained in the the division of pension benefits to draft these orders. These professionals are better acquainted with the nuances of each plan as they have typically dealt with varied employee retirement benefits. Each company is different. There's no "cookie cutter" pension or QDRO.
Judgments usually delineate who will draft the retirement division orders and how much each party will pay. Most Judgments do not contain deadlines for the process so be proactive. Your attorney is busy tying up other loose ends and may expect that you will continue the process:
1. Get in touch with the professional who will be drafting the qualified orders. Find out the fees and where to pay them. Most charge a flat fee per order.
2. Be prompt in making payment. These companies do not begin the process until they are paid.
3. Follow up and make sure your spouse has paid his or her share. If not, get in touch with your attorney and ask her to try to move things along.
4. Check with your attorney or the preparer's website or office. Often there is a worksheet which must be filled out and documents needed such as statements showing balances at the time stated in the Judgment. Pull those together and ask your attorney to review and forward to the preparer.
4. Depending on the complexity of the plan or account to be divided, it can take several weeks before a draft is completed and circulated.5. Read the draft carefully. If needed, call the preparer or your attorney for clarification. The terms in the qualified order should mirror those described in the Judgment.
Once everyone has approved the qualified order, it is sent to the Judge for signature.
If both sides cannot agree on all of the language or calculations in the qualified order, it could mean a return to the Judge for interpretation.
Once entered by the Court, the qualified order is mailed to the Plan Administrator is named in the order. Clarify with your attorney exactly who is sending it in. It should be one of your counsel.
The Plan Administrator can be a designated employee or officer of the business, or an investment company contracted by the employer such as Fidelity.Each Plan Administrator has its own approval process which can take up to sixty days. Most Administrators will notify you directly by mail if the qualified order is accepted or rejected.
The letter of approval will spell out exactly how the Administrator will comply.
It's not unusual for an order to be rejected, often for simple reasons such as an updated plan description or incorrectly named administrator. If that occurs, do not be alarmed. Administrators must comply with IRS and other state and/or federal requirements which are forever changing.
If rejected the Administrator will spell out exactly what provision needs modification or tweaking. The preparer typically makes the change upon receipt of the rejection letter with minimal charge.
The entry and approval process then repeats itself, but usually at a faster pace.It all seems complicated, but these are fairly common orders.
The end is in sight.