Marriage and divorce law is state-specific. QDROs must bridge and comply with both federal and state law.
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You can can read the most complete available description of how to divide MA state pensions in divorce here. Their sample DRO formula freezes “Years of Service”–illustrated with Line 4 “Freeze Y of S” in the chart that you can see on this page–which could cut the alternate payee’s benefit by almost half.) See this section about MA formulas for pension division to learn more about legal–but not necessarily fair–ways of dividing MA public pensions. 18, paragraph 5–that most DRO experts find unfair. The sample DRO they give suggests a formula–on p. (You must be careful with this guide, however. The Massachusetts Teachers Retirement System (MTRS) provides a 40-page guide to MA DROs. You can read the actual language in Section 206, which starts on p. (They also provide a 120-page explanation of QDROs in this document.) The legal basis for a domestic relations order to count as “qualified” is laid out in federal law in the 1974 Employee Retirement Security Act (ERISA).
The US Department of Labor gives a good overview of QDROs in this 4-page document. Plan administrators will only divide retirement assets if they have a QDRO (or equivalent documents such as a DRO or COAP). Even when that separation agreement has been signed by a judge and the divorce is final, that is not enough for a retirement plan administrator to divide an account.
Attorney Julia Rueschemeyer is currently preparing QDROs and DROs only for her own divorce mediation clients.Ī QDRO (‘Qualified Domestic Relations Order’, and pronounced ‘quadro’) is a court order to a retirement account administrator that tells the administrator how and when to divide retirement benefits such as a 401K between spouses who have divorced.Ī separation agreement (“divorce agreement”) between divorcing spouses that specifies how retirement accounts should be divided is not enough for a pension or retirement plan administrator to divide accounts or benefits.
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