04 Apr Qualified Domestic Relations Orders (QRDO) in South Carolina
Divorcing couples often have a misconception that once their divorce is finalized, they are done with the process. One “loose end” that is often overlooked is entry of a Qualified Domestic Relations Order (QDRO) to divide certain retirement accounts pursuant to the final divorce decree. QDROs are entered according to the Employee Retirement Income Security Act of 1974 (ERISA).
What is a QDRO?
A QDRO is the instrument which transfers the right to receive a portion of a spouse’s earned retirement benefits through their participation in an employer-sponsored retirement plan. There are two individuals addressed in a QDRO: the spouse who earned the benefits (designated as the “participant”) and the spouse who is entitled pursuant to the divorce to receive a share of the benefit (designated as the “alternate payee”). QDROs can either award benefits to the alternate payee while the participant is alive or after the participant has died. Without a QDRO, the former spouse will have no rights to the participant’s retirement benefits.
What is Necessary Information for a QDRO?
Necessary information for each QDRO depends in part on the employer. With thousands of private retirement plans in the United States, different employers require different information on their QDROs. Thus, it is critical that you check with the participant’s employer to ensure the drafted QDRO meets all of the requirements of that participant’s employer. However, there are some common elements that all QDROs must contain to be approved by the court, including:
- The name and last known mailing address for both the participant and the payee
- The name of the retirement plan
- The dollar amount or percentage of the benefit that is to be paid to the alternate payee
- The frequency and number of total payments
What Happens After A Spouse Obtains a QDRO?
Once the parties enter a QDRO with the Court, it must be sent to the employer’s plan administrator immediately. The plan administrator should then in turn confirm receipt of the QDRO and inform the sender whether it has been accepted. If the plan administrator accepts the QDRO, the parties do not need to take any further steps. If the plan administrator rejects it, however, they must provide a clear explanation of the reasons for rejection, and you should take the necessary steps to fix the mistakes. One way to avoid wasted court time is to send a letter with a proposed QDRO to the plan administrator to ensure it will comply with the plan requirements before entering it with the family court.
Get Help from an Experienced Family Law Attorney Today
QDROs are often considered one of the more complicated aspects of family law, given their financial complexity and need to conform with federal requirements. The skilled South Carolina family law attorneys at Klok Law Firm LLC can help make sure the QDRO is executed and entered correctly so you can receive the portion of retirement benefits you are entitled to receive.
Contact us today for a free consultation.