What Is the Most Common Oversight in Drafting a QDRO for a Defined Contribution Plan?
When drafting a QDRO for a participant covered under a defined contribution plan, such as a 401(k) plan, do not simply provide the alternate payee with 50 percent of the participant’s account balance as of the date of divorce. The alternate payee should be entitled to future growth on her share of the benefits, and to a pro rata share of any contributions made to the plan after the date of divorce, if they are attributable to periods or plan years before the divorce. Many times, a plan administrator delays making any plan contributions until after the end of the plan year.
