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A qualified domestic relation order is a domestic
relations order that creates or recognizes the existence of an alternate
payee's right to receive, or assigns to an alternate payee the right to
receive, all or a portion of the benefits payable with respect to a
participant under a pension plan, and that includes certain information
and meets certain other requirements.
Reference: ERISA § 206(d)(3)(B)(i); IRC §
414(p)(1)(A)
A domestic relations order is a judgment, decree, or
order (including the approval of a property settlement) that is made
pursuant to state domestic relations law (including community property
law) and that relates to the provision of child support, alimony payments,
or marital property rights for the benefit of a spouse, former spouse,
child, or other dependent of a participant.
A state authority, generally a court, must actually
issue a judgment, order, or decree or otherwise formally approve a
property settlement agreement before it can be a domestic relations order
under ERISA. The mere fact that a property settlement is agreed to and
signed by the parties will not, in and of itself, cause the agreement to
be a domestic relations order.
There is no requirement that both parties to a marital
proceeding sign or otherwise endorse or approve an order. It is also not
necessary that the pension plan be brought into state court or made a
party to a domestic relations proceeding for an order issued in that
proceeding to be a domestic relations order or a qualified domestic
relations order. Indeed, because state law is generally preempted to the
extent that it relates to pension plans, the Department takes the position
that pension plans cannot be joined as a party in a domestic relations
proceeding pursuant to state law. Moreover, pension plans are neither
permitted nor required to follow the terms of domestic relations orders
purporting to assign pension benefits unless they are QDROs.
Reference: ERISA §§ 206(d)(3)(B)(ii), 514(a),
514(b)(7); IRC § 414(p)(1)(B)
A domestic relations order may be issued by any state
agency or instrumentality with the authority to issue judgments, decrees,
or orders, or to approve property settlement agreements, pursuant to state
domestic relations law (including community property law).
Reference: ERISA § 206(d)(3)(B)(ii); IRC §
414(p)(1)(B)
A domestic relations order can be a QDRO only if it
creates or recognizes the existence of an alternate payee's right to
receive, or assigns to an alternate payee the right to receive, all or a
part of a participant's benefits. For purposes of the QDRO provisions, an
alternate payee cannot be anyone other than a spouse, former spouse,
child, or other dependent of a participant.
Reference: ERISA § 206(d)(3)(K), IRC § 414(p)(8)
QDROs must contain the following information:
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The name and last known mailing address of the
participant and each alternate payee
-
The name of each plan to which the order applies
-
The dollar amount or percentage (or the method of
determining the amount or percentage) of the benefit to be paid to the
alternate payee
-
The number of payments or time period to which the
order applies
Reference: ERISA § 206(d)(3)(C)(i)-(iv); IRC §
414(p)(2)(A)-(D)
There are certain provisions that a QDRO must not
contain:
-
The order must not require a plan to provide an
alternate payee or participant with any type or form of benefit, or
any option, not otherwise provided under the plan
-
The order must not require a plan to provide for
increased benefits (determined on the basis of actuarial value)
-
The order must not require a plan to pay benefits
to an alternate payee that are required to be paid to another
alternate payee under another order previously determined to be a QDRO
-
The order must not require a plan to pay benefits
to an alternate payee in the form of a qualified joint and survivor
annuity for the lives of the alternate payee and his or her subsequent
spouse
Reference: ERISA §§ 206(d)(3)(D)(i)-(iii), 206(d)(3)(E)(i)(III);
IRC §§ 414(p)(3)(A)-(C), 414(p)(4)(A)(iii)
There is nothing in ERISA or the Code that requires that a QDRO
(that is, the provisions that create or recognize an alternate payee's
interest in a participant's pension benefits) be issued as a separate
judgment, decree, or order. Accordingly, a QDRO may be included as part of
a divorce decree or court- approved property settlement, or issued as a
separate order, without affecting its qualified status. The order must
satisfy the requirements described above to be a QDRO.
Reference: ERISA § 206(d)(3)(B); IRC § 414(p)(1)
A domestic relations order that provides for child
support or recognizes marital property rights may be a QDRO, without
regard to the existence of a divorce proceeding. Such an order, however,
must be issued pursuant to state domestic relations law and create or
recognize the rights of an individual who is an alternate payee (spouse,
former spouse, child, or other dependent of a participant).
An order issued in a probate proceeding begun after the
death of the participant that purports to recognize an interest with
respect to pension benefits arising solely under state community property
law, but that doesn't relate to the dissolution of a marriage or
recognition of support obligations, is not a QDRO because the proceeding
does not relate to a legal separation, marital dissolution, or family
support obligation.
Reference: ERISA § 206(d)(3)(B); IRC § 414(p)(1);
Advisory Opinion 90-46A; see Boggs v. Boggs, No. 97-79 (S. Ct. June 2,
1997)
If an alternate payee is a minor or is legally
incompetent, the order can require payment to someone with legal
responsibility for the alternate payee (such as a guardian or a party
acting in loco parentis in the case of a child, or a trustee as agent for
the alternate payee).
Reference: Staff of the Joint Committee on Taxation,
Explanation of Technical Corrections to the Tax Reform Act of 1984 and
Other Recent Tax Legislation, 100th Cong., 1st Sess. (Comm. Print 1987) at
222
A QDRO can assign rights to pension benefits under more
than one pension plan of the same or different employers as long as each
plan and the assignment of benefit rights under each plan are clearly
specified.
Reference: ERISA § 206(d)(3)(C)(iv); IRC §
414(p)(2)(D)
Although every QDRO must contain certain provisions,
such as the names and addresses of the participant and alternate payee and
the name of the plan, the specific content of the rest of the QDRO will
depend, as explained in more detail in Chapter 3, on the type of pension
plan, the nature of the participant's pension benefits, the purposes
behind issuing the order, and the intent of the drafting parties.
Under Federal law, the administrator of the pension
plan that provides the benefits affected by an order is the individual (or
entity) initially responsible for determining whether a domestic relations
order is a QDRO. Plan administrators have specific responsibilities and
duties with respect to determining whether a domestic relations order is a
QDRO. Plan administrators, as plan fiduciaries, are required to discharge
their duties prudently and solely in the interest of plan participants and
beneficiaries. Among other things, plans must establish reasonable
procedures to determine the qualified status of domestic relations orders
and to administer distributions pursuant to qualified orders.
Administrators are required to follow the plan's procedures for making
QDRO determinations. Administrators also are required to furnish notice to
participants and alternate payees of the receipt of a domestic relations
order and to furnish a copy of the plan's procedures for determining the
qualified status of such orders.
It is the view of the Department of Labor that a state
court (or other state agency or instrumentality with the authority to
issue domestic relations orders) does not have jurisdiction to determine
whether an issued domestic relations order constitutes a qualified
domestic relations order. In the view of the Department, jurisdiction to
challenge a plan administrator's decision about the qualified status of an
order lies exclusively in Federal court.
Reference: ERISA §§ 206(d)(3)(G)(i)(II), 404(a),
502(a)(3), 502(e), 514; IRC § 414(p)(6)(A)(ii)
The administrator of an employee benefit plan is the
individual or entity specifically designated in the plan documents as the
administrator. If the plan documents do not designate an administrator,
the administrator is the employer maintaining the plan, or, in the case of
a plan maintained by more than one employer, the association, committee,
joint board of trustees, or similar group representing the parties
maintaining the plan. The name, address, and phone number of the plan
administrator is required to be included in the plan's summary plan
description. The summary plan description is a document that the
administrator is required to furnish to each participant and to each
beneficiary receiving benefits. It summarizes the rights and benefits of
participants and beneficiaries and the obligations of the plan.
Reference: ERISA §§ 3(16), 102(b), 29 CFR §
2520.102-3(f); IRC § 414(g), Treas. Reg. § 1.414(g)-1
A determination of whether an order is a QDRO
necessarily requires an interpretation of the specific provisions of the
plan or plans to which the order applies and the application of those
provisions to specific facts, including a determination of the
participant's actual pension benefits under the plan. The Department
will not issue opinions on such inherently factual matters.
Reference: ERISA Procedure 76-1, 41 Fed. Reg. 36281
(1976)
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