The Cost of Qualified Domestic Relations Orders
A recent article in the Wall Street Journal (Nov. 9, 2004, Jennifer Saranow) highlights a little noticed May, 2003 change to the federal Employee Retirement Security Act (ERISA) regarding a charges for the review of a Qualified Domestic Relations Order (QDRO)in a divorce.
A QDRO is the order which divides a parties pension, retirement benefits or 401K accounts at the time of a divorce. The order is customarily prepared by one of the parties attorneys or a pension consultant and submitted to the Plan Administrator for review, approval and implementation.
Prior to May, 2003, the federal regulations precluded plan administrators from charging individual accounts for the review, approval and implementation of QDRO's.
As of May, 2003 the federal regulations were changed to permit administrators or employers to charge the employee for this service.
The article reports that it has taken a year or so for the change to be implemented, but that plans and employers are now regularly deducting the costs related to the QDRO from the plan.
Attorneys for divorce litigants should be aware of this change and bargain for the allocation of these costs just as they do the allocation of the costs of preparing the QDRO. Otherwise, the plan owner may have the full cost assessed against them.
Can I still file a DORO, if it was not put in the divorce papers, It just stated I was to get no more then 50% of my former Husbands pension for the 16?12 years we were married , he agreed
Carol Bigley 919-477-4967, Please given me advise
I can not give you advice other than to tell you that generally federal law (ERISA) requires that a QDRO be entered in order to effectuate the distribution of a pension plan which is subject to ERISA. I do not know of a North Carolina divorce attorney who could give you advice and/or prepare a QDRO, if necessary. But, would suggest that you seek someone out, explain your circumstance and be guided by their advice. Do so quickly because if a QDRO is required you may be totally unprotected until the QDRO is done and filed with the plan administrator.
if my divorce was finalized in march 2005 and its now march 2006, can i still have a qdro drawn up and the funds releases? is there a time limit in which the qdro must be filed?
We cannot give you legal advice, and you should confer with the Attorney who represented youi in the divorce.
But, generally speaking there is no time limit for the entry of the QDRO. However, until it is entered you will have no rights to the pension in question, and, probably, none of its survivor or death benefits. So please do not delay.