Can the QDRO simply include language that provides the alternate payee with a specified percentage of benefits “accumulated during the marriage?”
A-26: No. You should avoid using the term “accumulated during the marriage” when defining the alternate payee’s benefits. This term cannot be properly interpreted by the Plan Administrator. It is acceptable to state the alternate payee’s benefits in terms of a specific percentage or dollar amount of the participant’s accrued benefit as of a specific date. Alternatively, you may include language that utilizes a standard “coverture approach” (i.e.: years of service earned during the marriage divided by total service as of date of retirement) which bases the alternate payee’s share of the benefits on the participant’s accrued benefit as of his/her date of retirement. In other words, if the alternate payee is allowed to commence his/her share of the benefits before the participant’s actual date of retirement, then both the denominator of the coverture fraction and the participant’s accrued benefit should be calculated as of such earlier date.
Related Questions
- Can a QDRO under a defined benefit pension plan provide the alternate payee with "interest and investment earnings" on his/her assigned share of the benefits?
- Can a QDRO provide the alternate payee with a portion of the participants "future" benefits under the Plan ?
- What is the earliest date on which the alternate payee can begin to receive benefits under a QDRO?
