QDROs (Qualified Domestic Relations Orders) are required by federal law. Congress created them over 20 years ago to protect both husbands and wives in a divorce regarding the equal division of employer-managed retirement plans earned during the marriage, as many people used to get completely shut out.
NCRC clients don’t have to pay a lawyer to do a QDRO. They can try to do it themselves using a standard form from the employer. However, this carries unknown risks to one (usually the non-employee spouse) or both parties, since they are designed with the employer’s needs in mind, not the parties.
A QDRO has to fulfill two sets of requirements: the federal laws and the retirement plan administrator’s rules. NCRC mediators don’t prepare them because they are too complicated. As retirements are often the largest or second largest asset a couple owns, having rules to protect both parties is like having rules about buying and selling houses and mortgages. We saw what happened when those rules were diminished over the past decade. On the other hand, IRAs are considered private plans, so that there are fewer rules about dividing and transferring those, and we can address them in our Marital Settlement Agreements (MSAs). That’s why we try to use IRAs for rollovers as much as possible. Otherwise, we refer out to attorneys who do QDROs for both parties on a neutral basis.
Bill Eddy, LCSW, CFLS
Senior Family Mediator
National Conflict Resolution Center
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