In South Carolina, one spouse’s pension, 401K, or other employee benefit account may be subject to equitable division in a divorce. A QDRO, or “qualified domestic relations order,” provides the means to implement that award. In order for someone who is not a participant in a private employee benefit plan to receive funds from that plan, the Employee Retirement Income Security Act (ERISA) requires the plan administrator to receive and approve a QDRO.
There are two important terms to understand when discussing QDROs. The participant is the person participating in the benefit plan. The alternate payee is the person who receives an interest in the plan via the QDRO. The Department of Labor’s Frequently Asked Questions about QDROs explains that an alternate payee can only be the participant’s spouse, former spouse, child, or other dependent. If your divorce decree or separation agreement divides your spouse’s pension, or permits you to collect alimony or child support from a pension or other benefit plan, you will need a QDRO to implement that award.
How can I obtain a QDRO?
A QDRO must contain the following:
- 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 of the benefit (or the method of determining the amount or percentage) to be paid to the alternate payee; and
- the number of payments or the time period to which the order applies.
Generally, when your divorce is final and the divorce decree issued, your attorney must submit a QDRO to the court for approval and then to the plan administrator. A separation agreement by itself is insufficient. A QDRO does not have to be part of a divorce proceeding, but it must be an order or judgment issued pursuant to state domestic relations law recognizing an alternate payee’s rights. A QDRO may cover more than one alternate payee and more than one plan.
Once the QDRO is submitted to the plan administrator, it is the administrator’s job to determine whether the order in fact is a QDRO. Employee benefit plans are legally required to establish reasonable procedures for determining the status of domestic relations orders and to administer distributions pursuant to QDROs.
QDROs Necessary for Public Benefit Plans
As noted above, ERISA requires a QDRO to recognize an alternate payee when the participant is part of a private employee benefit plan. Benefit plans for public plans (e.g., for state and federal government employees) are not governed entirely by ERISA but by a variety of laws and regulations. Nonetheless, these plans typically require a QDRO for distributions to an alternate payee as well. The requirements may differ somewhat from those set out by ERISA, however.
Consult a Greenville Family Lawyer
If you have been awarded an interest in your ex-spouse’s pension plan, it is best to file a QDRO as soon as possible to protect your rights in that plan. Your rights may be compromised if, before the QDRO is in place, certain circumstances arise – for example, if the participant remarries, dies, retires, or withdraws plan funds before retirement. It is recommended to have an attorney’s help with the QDRO process. Attorney Robert Clark has years of experience representing individuals in all manner of family law cases. Contact Robert at Greenville Family Law today for a consultation.