The Division of Pensions Through Qualified Domestic Relations Orders (QDRO)

The Division of Pensions Through Qualified Domestic Relations Orders

The U.S. Department of Labor Employee Benefits Security Administration maintains a website containing information about QDROs and the QDRO process and requirements.

The main publication on the website is an introduction to Qualified Domestic Relations Orders which provides general information about the qualified domestic relations orders (QDROs) under the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986.

The site begins with this introduction:

Introduction

More than 48 million private wage and salary workers are currently covered by employer-sponsored pension plans in the United States. For many of these Americans, pension savings represent one of their most significant assets. For this reason, whether and how to divide a participant's interest in a pension plan are often important considerations in separation, divorce, and other domestic relations proceedings. While the division of marital property generally is governed by state domestic relations law, any assignments of pension interests must also comply with Federal law, namely the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986 (the Code). Under ERISA and the Code, pension interests may be assigned only if the judgment, decree, or order creating or recognizing a spouse's, former spouse's, child's, or other dependent's interest in an individual's pension benefits constitutes a "qualified domestic relations order" or "QDRO."

This booklet was prepared by the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor to provide general guidance about QDROs(1) to employers, pension plan administrators, participants, beneficiaries, employee benefit professionals, and domestic relations specialists. The views expressed in this booklet represent the views of the Department of Labor.

Chapter 1 provides a general overview of the QDRO provisions and the basic rules governing the content of QDROs.

Chapter 2 focuses on the duties of pension plan administrators in making QDRO determinations and in administering pension plans for which related QDROs have been issued.

Chapter 3 focuses on issues to be considered in drafting a QDRO. This chapter also discusses the provisions of section 205 of ERISA, which are substantially parallel to the provisions contained in sections 401(a)(11) and 417 of the Code to the extent these sections apply to QDROs. The provisions of section 205 require that pension plans provide the spouses of pension plan participants with certain rights to survivor benefits, which are relevant to the provisions governing QDROs. Sample QDRO language developed by the Department of the Treasury and the Internal Revenue Service, in consultation with the Department of Labor, is provided in Appendix C.

It is the hope of EBSA that the information furnished in this booklet will promote better understanding of the rights and obligations of those involved in domestic relations proceedings and those responsible for administering pension plans.(2) A better understanding of these provisions of law should reduce the costs and burdens associated with QDRO determinations for both pension plans and the affected individuals.

The department recognizes that this booklet does not answer every question that may arise in the development and administration of QDROs. In this regard, the department is willing to consider addressing specific issues through its advisory opinion process (refer to question 1-14 regarding advisory opinion requests on whether a domestic relations order is a QDRO). The ERISA Advisory Opinion Procedure governing this process is set forth in Appendix B of this booklet.

For additional material and to read the full text of that publication you can visit the official site at:

The Division of Pensions Through Qualified Domestic Relations Orders