Qualified Domestic Relations Orders
In a divorce, often one of the largest marital assets are retirement accounts. Parties and attorneys need to take care that retirement benefits are not omitted or dealt with improperly in the course of a divorce proceeding.
Private companies that offer retirement plans, including 401(k) plans, 403(b) and 457(b) plans, and other deferred compensation or defined benefit plans are governed by the provisions of ERISA, which limits who may withdraw funds from retirement accounts. In a dissolution, these accounts must be divided pursuant to specialized orders that are referred to as "Qualified Domestic Relations Orders," or QDROs for short. A QDRO ensures that the non-employee spouse can access his or her share in the employee spouse's retirement benefit, and that after the employee's death or retirement, that the non-employee spouse will retain his or her benefits.
Retirement benefit plans that are offered by state, local, or federal governments are not governed by ERISA and so do not require QDROs, but these plans must be joined as parties to dissolution actions and the retirement benefits must still be dealt with by stipulated division orders in a procedure that mirrors that of a QDRO.