What Is the Urgency of Drafting a QDRO when the Participant Has Already Retired?
If the plan participant is already in receipt of his pension annuity, it is imperative to execute the QDRO immediately and submit it to the plan administrator. Even if the plan administrator is willing to review the draft order before the judge signs it, don’t do it. Many plan administrators will not withhold the specified portion payable to the alternate payee until they receive an executed copy of the QDRO. Furthermore, they will not make any payments to the alternate payee on a retroactive basis. When they receive the executed QDRO, even if it is not yet deemed qualified, they must immediately segregate benefits pursuant to 414(p)(7) of the Internal Revenue Code. Once any deficiencies in the QDRO are cured (if done so in a timely manner), all segregated benefits become payable to the alternate payee in a single, lump-sum payment.
Related Questions
- Why Must a Qualified Preretirement Survivor Annuity Be Addressed in a QDRO when the Participant Has Not Yet Retired?
- Can a QDRO provide the alternate payee with a portion of the participants "future" benefits under the Plan ?
- What Is the Urgency of Drafting a QDRO when the Participant Has Already Retired?
