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If you are a family law attorney who drafts QDROs, the best thing you can do for yourself is have the following publications in your library: (1) Gary Shulman, The Qualified Domestic Relations Order Handbook (2d ed. Aspen Law & Business 1998); (2) A Handbook for Attorneys on Court-Ordered Retirement, Health Benefits, and Life Insurance (U.S. Office of Personnel Management, 1995); (3) QDROs: The Division of Pensions Through Qualified Domestic Relations Orders (U.S. Dep't of Labor, Pension and Welfare Benefits Administration, 1997). For those who draft QDROs on a regular basis, The QDRO Report, published monthly by Aspen Publishers, is also useful. These publications provide the basics on drafting enforceable QDROs. This month's article will provide some QDRO drafting tips gleaned from these publications and from recent cases.


Most private, future benefit plans are regulated by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. ERISA contains an antiassignment clause which prevents pension owners from transferring their pension rights to another person. I.R.C. 401(a)(3); 29 U.S.C. 1056(d)(3)(A). The antiassignment clause does not apply, however, if a state court order dividing plan benefits constitutes a QDRO. I.R.C. 401(a)(13)(B); 29 U.S.C. 1056(d)(3)(A), 1144(b)(7).

The QDRO provisions of ERISA are intended only to remove any federal barrier to the division of retirement benefits through a properly drafted order. The QDRO provisions of ERISA do not provide a state court with any substantive authority to divide any specific pension plan. Parker v. Parker, 641 So. 2d 1133 (Miss. 1994). Further, because the antiassignment clause does not apply to QDROs, the rights of a first spouse with a QDRO are superior to any rights which might subsequently be acquired by a later spouse. Ross v. Ross, 308 N.J. Super. 132, 705 A.2d 784 (App. Div. 1998).

The QDRO provisions of ERISA apply to all ERISA-regulated plans, including disability and insurance plans, as well as to the more traditional retirement plans. Tolstad v. Tolstad, 527 N.W.2d 668 (N.D. 1995).


In order to constitute a QDRO, a divorce decree must constitute a domestic relations order. A domestic relations order, in turn, is any order which grants child support, alimony, or property rights to the pension owner's spouse under state domestic relations law. I.R.C. 414(p)(1)(B); 29 U.S.C. 1056(d)(3)(b)(ii).

A court cannot issue a QDRO until both parties have had an opportunity to be heard. Turnage v. Turnage, 653 So. 2d 485 (Fla. Dist. Ct. App. 1995) (error to grant QDRO 16 days after filing of divorce complaint but before husband had time to file answer). A court can, however, issue a QDRO after the owning spouse has filed for bankruptcy as the QDRO only restates the pension division portion of the divorce decree in enforceable form. Lowenschuss v. Lowenschuss, 453 Pa. Super. 340, 683 A.2d 1214 (1996), appeal denied, 548 Pa. 628, 693 A.2d 967 (1997). The court cannot, however, issue a QDRO after the death of the owning spouse. Ross v. Ross, 308 N.J. Super. 132, 705 A.2d 784 (App. Div. 1998).

As the statutory definition of a QDRO is a "domestic relations order," a QDRO can be entered after a divorce to enforce alimony or child support as well as property division. In re Marriage of LeBlanc, 944 P.2d 686 (Colo. Ct. App. 1997); Hayden v. Hayden, 662 So. 2d 713 (Fla. Dist. Ct. App. 1995); In re Marriage of Bruns, 535 N.W.2d 157 (Iowa Ct. App. 1995). There is some question, however, as to whether a QDRO can be used to enforce a general monetary award in a divorce, or whether such an order would constitute an impermissible modification of the property division award. See DeSantis v. DeSantis, 714 So. 2d 637 (Fla. Dist. Ct. App. 1998).

In one wrongly decided decision, Hoy v. Hoy, 29 Va. App. 115, 510 S.E.2d 253 (1999), the trial court refused to enter a QDRO to enforce unpaid spousal support, and the court of appeals affirmed. The appellate court held that the wife's motion for entry of a QDRO to allow her to have an interest in the pension plan would be an impermissible attempt to reopen and modify the court's final property division. Of course, the QDRO would do no such thing; it is merely an enforcement mechanism, a way around the antialienation provision of ERISA, to allow the wife to attach the pension to satisfy the unpaid alimony.


The QDRO must be one which "creates or recognizes the existence of an alternate payee's right to . . . receive all or a portion of the benefits" payable to the owner.

The order must specify the name and last known mailing address of each participant and each alternate payee, the amount or percentage to be received by each alternate payee (or the manner in which the amount or percentage should be determined), the number of payments or periods for which the order is effective, and the precise retirement plan or plans to which the order applies. These requirements are to assist the plan administrator in implementing the order. If the address is not present in the order but the plan administrator has the address in the personnel records, there is substantial compliance with the QDRO requirements. Tolstad v. Tolstad, 527 N.W.2d 668 (N.D. 1995). But see Hawkins v. Commissioner, 86 F.3d 784 (10th Cir. 1996); Ross v. Ross, 308 N.J. Super. 132, 705 A.2d 784 (App. Div. 1998).

In listing the precise plan to which the order applies, it is not necessary to give the plan's formal legal name. Any language which reasonably identifies the plan in fact is sufficient. Ross v. Ross, 308 N.J. Super. 132, 705 A.2d 784 (App. Div. 1998); Tolstad v. Tolstad, 527 N.W.2d 668 (N.D. 1995).

The order cannot require the plan to provide an alternate payee any type, form, or amount of benefit not available to the owning spouse. It also cannot require the plan administrator to provide to one alternate payee any benefit already being paid to another alternate payee under another QDRO.

This provision is not violated if the order provides for a minimum amount in addition to the traditional benefit formula. Stewart v. Stewart, 644 So. 2d 1152 (La. Ct. App. 1994). This provision is also not violated if the order requires payment to the nonowning spouse of retroactive appreciation in his or her share of the defined contribution plan. In re Marriage of Gardner, 973 S.W.2d 116 (Mo. Ct. App. 1998). The provision is violated, however, if the order allows the nonowning spouse to designate a successor in interest. In re Marriage of Shelstead, 66 Cal. App. 4th 893, 78 Cal. Rptr. 2d 365 (1998).

The order cannot require that payments to the nonowning spouse begin before the soonest date of retirement under the plan. The earliest retirement date is the soonest date after the age of 50 on which the owning spouse either receives benefits or could begin to receive benefits if he or she left employment. I.R.C. 414(p)(4)(ii); 29 U.S.C. 1056(d)(3)(E)(ii).


Once the state court issues an order awarding a share of a pension to a nonowning spouse, the order is then submitted to the plan administrator, who determines whether the order meets the requirements of a QDRO. Federal law requires each pension plan to establish reasonable procedures for making this determination and also requires that the administrator notify both spouses of the determination. See In re Marriage of Bruns, 535 N.W.2d 157 (Iowa Ct. App. 1995) (approval by plan administrator necessary).

If either spouse disagrees with the plan administrator's determination, the issue can be tried before a judge. State and federal courts have concurrent jurisdiction over this issue. In re Marriage of Oddino, 16 Cal. 4th 67, 65 Cal. Rptr. 2d 566, cert. denied, 118 S. Ct. 1302 (1998).


Since all plan administrators are required to maintain written QDRO procedures, request these procedures before you draft the QDRO. It is possible you might find a surprise, such as a clause allowing a lump-sum distribution.

Do not wait to draft the QDRO. Draft it with the separation agreement or proposed divorce decree. If the owning spouse dies before the QDRO is entered, the alternate payee may be out of luck. It can also be difficult to enforce a QDRO if the owning spouse retires before the QDRO is entered. Every monthly pension check made to the owning spouse before the QDRO is effective is one less check sent to the alternate payee. Drafting a QDRO with the divorce will also avoid potential bankruptcy problems.

Do not include the present dollar amount value in the separation agreement or QDRO. The present value as determined by an actuary is only a snapshot of what the pension is worth at a particular moment in time. Present value changes each and every day until the owning spouse retires. Regardless of which party you represent, always state the alternate payee's share in the form of a percentage of his or her monthly accrued pension. Always use the coverture-fraction approach to division, which is the best way of providing inflationary protection under a defined benefit plan.

Gary Shulman, author of The Qualified Domestic Relations Order Handbook (2d ed., Aspen Law & Business 1998), recommends the following language:

When drafting a QDRO for the Pension Benefit Guaranty Corporation (PBGC), you should consult PBGC Publication No. 1005, which contains two model QDROs for use with defined benefit pension plans: one for separate interest QDROs and one for shared payment QDROs. Unlike other ERISA-governed pension plans, the PBGC allows designation of a contingent alternate payee in the event of the death of the primary alternate payee.

Sometimes, an insurance company may have taken over a terminated pension plan. In such an event, a QDRO is still necessary, and do not let the plan administrator tell you a QDRO is not necessary.

In a QDRO for a defined contribution plan, include language regarding the disposition of the benefits in the event of the alternate payee's death before distribution.

If you do not draft QDROs on a regular basis, it might be advisable to associate with a family law attorney who specializes in QDROs. This area has become a sub-specialty of family law, with many attorneys devoting their practice exclusively to QDROs. The failure to draft an enforceable QDRO can result in malpractice liability. Williams v. Cooch & Taylor, No. 92C-03-024 (Del. Super. Ct. May 11, 1994); Barrett v. Hay, 893 P.2d 1372 (Colo. Ct. App. 1995) (malpractice action against accountants and others with respect to incorrect advice as to tax implications of the use of death proceeds received from an ERISA-qualified plan); Gale v. Williams, 299 Ill. App. 3d 381, 701 N.E.2d 808 (1998); see also Matter of Nomura, No. SB-96-0005-D (Ariz. Jan. 26, 1996); In re Solomon, No. 284,1999 (Del. Dec. 21, 1999).

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