Qualified Domestic Relations Order (QDRO)

A court order dividing retirement plans is called a qualified domestic relations order or QDRO. A federal law, the Employee Retirement Income Security Act, or ERISA, allows California to apply its community property rules to companies and employees operating inside the state. Court orders can be drafted to assign a portion of benefits to a former spouse for a variety of plans.

With more than 30 years of California family law practice to support us, we feel qualified to advise you on all retirement plans and QDRO situations should they arise. Please ask one of our QDRO attorneys before you agree to settle on matters of such importance. We understand the value of pensions.

Each type of QDRO plan has its own guidelines and methods for distributing retirement benefits. Below are descriptions of the various types of plans and the manner in which benefits are distributed between divorcing parties.

ERISA-Defined Benefit Plans

This is a private retirement plan set up by a company, union or individual that provides a participant with a monthly income for life upon retirement. Examples include the IBM Retirement Plan, AT&T Pension Plan and Bricklayers Pension Fund-Local 21.

When a QDRO is drafted for this type of plan, benefits to a former spouse may start when the participant reaches his/her earliest retirement age, when he/she actually retires or at any time in between. The benefit is distributed in monthly payments for the lifetime of either the participant or the former spouse.

ERISA-Defined Contribution Plans

This is a private tax-deferred savings plan set up by a company, union or individual that will provide an income to a participant upon retirement. Examples include 401(k) plans, profit-sharing plans and employee stock ownership plans sponsored by a company, e.g., John Doe IRA account No. 123456.

According to the terms of the QDRO, benefits may be paid in a lump sum payment to a former spouse immediately, when the participant reaches his/her earliest retirement age or at any other time as permitted by the plan.

Federal Government Plans

Government employees are members of either the Civil Service Retirement System (CSRS) or the Federal Employees' Retirement System (FERS). Examples include employees of the Postal Service and Federal Aviation Department and civilian employees on military bases.

When a court order acceptable for processing is drafted, monthly benefits to a former spouse will start when the participant retires and will continue being paid for the lifetime of the participant. If the former spouse is entitled to a former spouse survivor annuity, the monthly annuity will start when the participant dies and will continue for the life of the former spouse.

United States Military Plans

The Military Retirement System provides benefits to members of the uniformed services. Examples include the Army, Air Force, Navy, Marines, Coast Guard, Reserves, National Guard, Public Health Service and National Oceanic and Atmospheric Administration.

When a retired pay court order is drafted, monthly benefits will be sent to the former spouse when the member retires and will continue for the lifetime of the member. If the former spouse is entitled to a survivor benefit plan annuity (SBP), the monthly annuity will start when the member dies and continues for the lifetime of the former spouse.

State And Local Government And Public School Employee Plans

These plans cover anyone who is employed by a state or local municipality in any capacity or any public school teacher throughout the country. An example is the California Teachers Pension & Annuity Fund.

When a domestic relations order is drafted, monthly benefits will be sent to the former spouse when the participant retires and continue for the lifetime of the participant. Under some plans, a former spouse may be designated as the beneficiary of a survivor annuity under a specific benefit option that must be specified in the order; otherwise, typically all payments to the former spouse end when the participant dies.

Hiring a California family law attorney with QDRO experience can make a significant difference in reaching a just settlement. Call one of our experienced Sacramento divorce attorneys at 866-720-3666 or contact us through our website to discuss your situation.

This does not constitute a guarantee, warranty or prediction regarding the outcome of your legal matter.