Divorce and your spouse’s retirement plan
Virtually nothing about a divorce is uncomplicated. And that includes determining what share a divorcing person may claim of his or her spouse’s retirement accounts.
For those facing this issue, I recommend a guide by the nonprofit Pension Rights Center, “Dividing Retirement Benefits at Divorce,” available for free at www.pensionrights.org.
“Even if your divorce decree awards you a share of the retirement benefit ... you might still not be able to receive it unless you take certain additional steps after your divorce,” the guide explains.
To get your share of a benefit, you need to obtain a qualified domestic relations order (QDRO.)
Some terminology associated with a QDRO: A “participant” is the individual (male or female) who has earned a retirement benefit associated with his/her work. An “alternate payee” is the spouse who is requesting a portion of the participant’s retirement benefits. The alternate payee could be requesting benefits while the participant is alive or may be pursuing survivor benefits.
Every private retirement plan has its own rules regarding what must be included in a QDRO. But all QDROs must include the following:
Name and last known mailing address of the participant and alternate payee
Name of each plan to which the order applies
Dollar amount or percentage (or method of determining the amount or percentage) of benefit to be paid to the alternate payee
Number of payments or time period to which the order applies
Federal law states that a retirement benefit can only be divided between former spouses if there is a QDRO. In many circumstances, a retirement plan will require a QDRO that is a separate document from the divorce decree.
It is important to make a distinction between a “domestic relations order” (DRO) and a QDRO. Any family court can issue a domestic relations order, but the order becomes qualified only if accepted by the retirement plan. An alternate payee will only receive benefits if the plan is qualified.
Once the DRO is submitted to the court, the court must review the document to be sure it reflects what was decided in the divorce decree. If the court approves the DRO, the DRO should be submitted right away to the associated retirement plan. The retirement plan either qualifies the DRO or indicates in writing what is required to qualify it.
An attorney can help you obtain a QDRO. If you need assistance finding one, contact the local bar association. Another option is to use the National Pension Lawyers Network, a source of the Pension Rights Center.
If you represent yourself, without an attorney, inform the court that your spouse has earned retirement benefits, and make sure that he/she provides all the required information from the retirement plan that the court needs.
If the retirement plan is reluctant to provide the necessary information, remind the plan that Department of Labor regulations guarantee that alternate payees have the right to this information.
You can refer to “DOL: QDROs — the Division of Retirement Benefits through Qualified Domestic Relations Orders.”
Another resource is www.freeERISA. com, which will locate the most recent Form 5500. This form will contain contact information to identify the plan administrator. The administrator is mandated to provide you with the plan document and summary plan description; the participant’s benefit statements; a copy of the plan’s model QDRO, if available; and a copy of any QDRO that may be on file for participants
For specialized support, you can contact the Pension Counseling and Information Project, which provides free, personalized pension counseling and assistance regardless of age or income.
Elliot Raphaelson welcomes your questions and comments at raphelliot@gmail.com.