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What You Need to Know About Qualified Domestic Relation Orders During Your Divorce

Retirement Planning in Long Island NY DivorceAs a divorce attorney practicing primarily in the Nassau County and Suffolk County Supreme and Family Courts in NY, I work with many couples who have complex financial matters to divide in their divorce settlement. While some property and assets are relatively simple to split up, one of the most complex aspects of a divorce settlement can be the division of retirement or pension plans. These plans fall under the terms of a Qualified Domestic Relations Order or QDRO.

QDRO and ERISA

A Qualified Domestic Relations Order (QDRO) is a legal order subsequent to a divorce or legal separation that splits and changes ownerships of a retirement plan to give the divorced spouse their share of the asset or pension plan. QDRO’s are only subject to employee benefit or pension plans subject to the Employee Retirement Income Security Act (ERISA), which is the law that governs private sector pensions. These orders provide for marital or community property division between the participant and the alternate payee. A QDRO also qualifies for the payment of alimony or child support to the alternate payee.

The QDRO must meet the following requirements:

1. Contain the names and mailing addresses of the Participant and Alternate Payee

2. Clearly set forth the amount or percentage of the Participant’s benefits

3. Set forth the number of payments or period to which the Order applies

4. Refer to each Plan to which the Order applies

5. NOT require a Plan to pay any type or form of benefit, or any option not otherwise provided under the Plan

6. NOT require the Plan to provide increased benefits determined on the basis of actuarial value

7. 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.

Orders relating to these non-ERISA Plans are not “Qualified” and are simply called “Domestic Relations Orders” or DROs. They may be subject to state law or agency policy prior to acceptance and approval by the governmental plan.

QDROs can be difficult to properly utilize because every Plan is different and may contain different benefits, survivorship options, terms and procedures for administration and are constantly changing.

Contact Us for More Information

If you have any questions regarding how a pension or retirement account should be divided in your divorce or separation agreement, give us a call at 631-923-1910. The divorce law office of Robert E. Hornberger, P.C. will be pleased to offer you a free complimentary consultation to discuss your options.