Requirements For The Order
The proposed (un-signed) Order must comply with three general sets of rules:
- State domestic relations law. Requirements may vary widely by state. For example, in New York: DRL §236; the distribution must be “equitable” (fair).
- U.S. tax code; preservation of the tax deferred status of the funds is the responsibility of the movant.
- The Employee Retirement Income Security Act (ERISA) contains requirements that are essentially parallel to those in the Code. Among such requirements is that the method of distribution must be selected from among the options available to the Participant, according to the terms of the Plan. The participant may not order the Plan to distribute the money in a manner not consistent with the Plan's terms.
All QDROs must contain certain data:
- Full Name, and Last Known Mailing Address of the Participant, Employee or Contributor (also referred to as the "Payee" or "Distributee"), and Spouse (or "Alternate Payee", etc.)
- Social Security Numbers of both Parties
- Formal name of the Plan
- Participant’s Plan Identification Number (if different from the Participant’s Social Security number)
- The amount payable Alternate Payee, or the method to be used to calculate such amount
- For a defined benefit plan, the duration the benefits are payable to the Alternate Payee
Read more about this topic: Qualified Domestic Relations Order
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