How may the participants retirement benefit be divided if the pension plan is a defined contribution plan?
An order dividing a retirement benefit under a defined contribution plan may adopt either a separate interest approach or a shared payment approach (or some combination of these approaches). Orders that provide the alternate payee with a separate interest, either by assigning to the alternate payee a percentage or a dollar amount of the account balance as of a certain date, often also provide that the separate interest will be held in a separate account under the plan with respect to which the alternate payee is entitled to exercise the rights of a participant. Provided that the order does not assign a right or option to an alternate payee that is not otherwise available under the plan, an order that creates a separate account for the alternate payee may qualify as a QDRO.
