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February 19, 2009

Domestic relations order (DRO)

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Definition

A  qualified domestic relations order (QDRO) means a domestic relations order (DRO) which creates or recognizes the existence of an alternate payee’s right to ( 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 plan, and  meets the following requirements:

It must clearly specify the following:

  • the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order,
  • the amount or percentage of the participant’s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined,
  • the number of payments or period to which such order applies, and
  • each plan to which such order applies.

And meets the following requirements

    • does not require a plan to provide any type or form of benefits, or any option, not otherwise provided under the plan,
    • does not require the plan to provide increased benefits (determined on the basis of actuarial value), and
    • does not require the payment of benefits to an alternate payee which are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order.

Referring Cite

IRC §414(p)(1)(B); ERISA §206(d)(3)(B)(ii);

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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