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What is a QDRO

By: Marvin Snyder

Q. What is a "QDRO"?
A. An approved court order under REA, issued as a DRO, that attaches or assigns all or part of a spouse's ERISA pension benefits as part of a divorce decree or settlement is a Qualified Domestic Relations Order.

Q. What is a "DRO"?
A. An order of a court of competent jurisdiction that applies to a pension in a divorce case is a Domestic Relations Order.

Q. What is "REA"?
A. The Retirement Equity Act of 1984, a federal law with the mechanism for the attachment of pensions otherwise inalienable.

Q. What is "ERISA"?
A. The basic federal law that defines and governs qualified plans, enacted in 1974, the Employee Retirement Income Security Act, which before REA prohibited benefit attachment or assignment.

Q. How does a DRO become a QDRO?
A. Upon receipt of a DRO, the Plan Administrator determines if it is qualified, and if so, approves it as a QDRO.

Q. Who is the Plan Administrator?
A. The person, official, committee or other entity named in the formal plan document or the corporate employer.

Q. Is there a time limit for determining that a QDRO is qualified?
A. Yes and no. If the pension benefit is in pay status to a retiree or if a benefit distribution is imminent, the Plan has eighteen months to decide, during which time benefit payments are suspended. If the pension is not yet payable, the Plan has a "reasonable" period of time (undefined) to review the DRO.

Q. For what types of plans are DROs and QDROs applicable?
A. Any pension-type plan (non- welfare plan) covered by ERISA, including for example defined benefit pension plans, defined contribution, profit sharing, thrift and savings and 401 (k) plans.

Q. What about non-ERISA plans?
A. Certain plans may accept court orders similar to a DRO, under their own procedures, such as, military or federal, state or local governments and quasi-government authorities or agencies.

Q. Is there a consulting service available that will prepare a draft DRO for a lawyer?
A. Yes: Pension Analysis Consultants, Inc.

Q. How do I get answers to other pension questions in divorce?
A. Call or write PENSION ANALYSIS CONSULTANTS, INC. in Elkins Park, PA.

PAC provides pension valuations, QDROs and actuarial reports for divorce attorneys and marriage dissolution mediators nationwide. Our Philadelphia offices are located in the suburb of Elkins Park, Pennsylvania, from where we serve the needs of legal professionals nationally, including east coast states such as New York, New Jersey, Virginia, North Carolina, Florida, Washington, D.C., and Maryland.