What If the Nonparticipant Predeceases the Participant?
The authors’ favorite sermonette to attorneys starts with, “Even though a QDRO meets the legal requirements of ERISA does not mean it’s a well drafted QDRO or one that will not be the center of litigation at a future date.” Not understanding what happens to the alternate payee’s share of the pension if she predeceases the plan participant is one of the most overlooked issues. When drafting a QDRO, however, many attorneys overlook critical issues solely to satisfy the requirements of the Internal Revenue Code. Their QDROs may not contain language regarding the disposition of the participant’s pension benefits in the event of the alternate payee’s death. This issue should be addressed in the QDRO, notwithstanding the ultimate restrictions imposed by the plan administrator based on the type of plan in question. Defined Contribution Plans. Under a defined contribution plan, such as a profit-sharing or 401(k) plan, many attorneys include a provision regarding the demise of the alternate pay
