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FAQ’s

What is a Qualified Domestic Relations Order (QDRO)? 

A QDRO is a DRO which (1) requires a tax qualified plan to assign or transfer some or all of a Participant’s plan benefits to an “Alternate Payee,” (2) meets the requirements of applicable federal law, and (3) satisfies the requirements contained in the plan’s QDRO Procedures.

Section 206(d)(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and Section 414(p) of the Internal Revenue Code of 1986, as amended, provide the specific legal definition of a QDRO.

What is a DRO? 

Generally, a DRO is a court order that (1) is made pursuant to state domestic relations law, and (2) provides for payment of child support, alimony, or marital property rights.

Who is a Participant? 

An individual who has accrued a benefit in a retirement plan based on his or her employment with the Plan’s sponsor.

Who is an Alternate Payee? 

An Alternate Payee can be the Participant’s spouse, former spouse, child, or other dependent.

Statutory Requirements of a QDRO

Section 414(p) of the Internal Revenue Code and Section 206(d)(3) of ERISA require that a QDRO include the following items:

  • The name and last known mailing address of the participant and each alternate payee;
  • The name of each plan to which the order applies;
  • The dollar amount or percentage (or the method of determining the amount or percentage) of the benefit to be paid to the alternate payee;
  • The number of payments or time period to which the order applies.

Section 414(p) of the Internal Revenue Code and Section 206(d)(3) of ERISA state that a QDRO cannot do the following:

  • The order must not require a plan to provide an alternate payee or participant with any type or form of benefit, or any option, not otherwise provided under the Plan;
  • The order must not require a plan to provide for increased benefits (determined on the basis of actuarial value);
  • The order must not require a plan to pay benefits to an alternate payee that are required to be paid to another alternate payee under another order previously determined to be a QDRO; and
  • The order must not require a plan to pay benefits to an alternate payee in the form of a qualified joint and survivor annuity for the lives of the alternate payee and his or her subsequent spouse.

For more information on QDRO requirements, the US Department of Labor developed a comprehensive, accessible resource “The Division of Retirement Benefits Through Qualified Domestic Relations Orders.”