The Complete QDRO Handbook by Carrad
The Department of Labor, Pension and Welfare Benefits Administration, QDROs publishes a booklet entitled The Division of Pensions Through Qualified Domestic Relations Orders. The PWBA booklet’s mandate to benefit plans encourages them to be helpful in working with attorneys, Alternate Payees, participants, courts and State IV-D Agencies. Detailed procedures are outlined, including the following requirements for written procedures:
1) Create their QDRO procedures so they do not “unduly inhibit or hamper” the process of qualifying a QDRO or making payments to the Alternate Payee. These payments should be in a “timely and cost-effective manner”.
2) Provide detailed written procedures to Alternate Payees, divorce attorneys, and participants as quickly as possible.
3) “Describe any time limits set by the plan administrator for making determinations”.
4) Describe “the steps the administrator will take to protect and preserve pension assets or benefits upon receipt of a DRO (for example, a description of when and under what circumstances plan assets will be segregated or benefit payments will be delayed or suspended)”
5) “An explanation of the information about the plan and benefits that is available to assist prospective alternate payees in preparing QDROs, such as summary plan descriptions, plan documents, individual benefit and account statements, and any model QDROs developed for use by the plan.”
6) “The plan may not condition its determinations of QDRO status on the use of any particular form.”
7) The plan is encouraged to provide a QDRO form “to assist in the preparation of a QDRO”. The PWBA booklet provides sample language for these forms.
8) The plan cannot question the validity of the DRO as to marriage or offspring.
9) The plan cannot reject a DRO because it does not conform to the plan’s form if it otherwise follows ERISA guidelines.
10) The plan cannot reject a DRO for failure to “specify factual identifying information that is easily obtainable by the plan administrator?”
11) If the DRO is not accepted as a QDRO by the Plan administrator, prompt notice should be given to all concerned and should:
a. Specify the reasons why the order is not a QDRO
b. Refer to the specific provisions of the plan on which the decision was based;
c. Explain any time limits that apply to the rights of the parties (such as the duration of any protective action the Plan will take to prevent withdrawal of the Alternate Payee’s share by participant;
d. Describe any additional material, information or modifications of the DRO required to make it a QDRO.
The written QDRO procedures are extremely important and should be obtained early in the divorce process, along with a copy of the Plan’s model QDRO if available. A phone call to the Plan Administrator should suffice. Properly executed plan procedures will include a complete checklist of plan requirements for approving a QDRO and the steps necessary for expedience.
Also ask for any informal booklets or information sheets provided to employees explaining their Plan, types of benefits available and how benefits are calculated. The Participant may also be able to supply these items.
Working with the Alternate Payee:
Obtaining the necessary statements from the Plan may be more difficult if working for the Alternate Payee, since the pension balance and personal salary information is included. A release signed by the Participant will solve this problem. Additionally, a letter from the attorney for the Alternate Payee to the Plan Administrator pointing out that ERISA duties pertain to both the Participant and Alternate Payee will usually produce the needed information. As a last resort, a court can issue an order to the Participant to sign a release of information form.
Alternately, it may be possible for the Alternate Payee to copy a statement available to her at home, if she may do so without causing additional problems with the home.