Common QDRO Mistakes to Avoid
1. Who Drafts the QDRO? - Specify who is responsible for having the QDRO completed. Also, specify who is paying for it.
2. Timing – It is preferred for the QDRO to be approved by the Plan Administrator prior to the divorce being finalized. The parties need to receive some type of confirmation that the QDRO has been received and accepted. Never assume that it has been completed.
3. What Part of the Pension is Marital Property? - Make sure that the QDRO specifies the numerator and denominator of the marital coverture fraction.
4. Gains and Losses – For defined contribution plans, specify how gains and losses are handled that occur after the divorce, but before the account is split
5. Can the Pension be Split? – Some benefit and pension plans cannot be divided. It is crucial to learn this before the divorce is final.
6. Analyze Benefit Options – Options vary from one plan to another. Make sure all available options are known