Benefits Think The legal challenges of a QDRO — are your clients informed?

In a my last post, I pointed out some of the complexity surrounding beneficiary designations in a multiple-provider environment — and potential legal challenges that are likely to result upon a participant’s death when multiple, different beneficiary designations exist.

Another area of similar concern is with Qualified Domestic Relations Orders. A QDRO is a court order dividing up a retirement plan balance upon divorce. A QDRO is usually a separate court order from the divorce agreement that satisfies the rules for QDROs under the tax code, as well as the plan’s procedures for determining that a domestic relations order is in fact a Qualified Domestic Relations Order. A plan must have extra diligence when a participant may have balances with more than one service provider under the plan. Those multiple providers need to be taken into account in the plan’s review and qualification process.