Why Might I Need a QDRO or a DRO?
Posted on Apr 4, 2014 8:29am PDT
Q. April K. of Massachusetts wants to know: "Why Might I Need a QDRO, or DRO?"
A. Spencer, from the QDRO Department of Pension Evaluators & QDROS
Of Troyan, Inc Associates Group replies: "The most common reason for needing a QDRO or DRO is that the parties in
a divorce do not have sufficient assets (e.g. cash, retirement accounts,
home equity) to permit the plan participant to keep his/her entire plan
benefit in exchange for the non-participant spouse being awarded another
asset. A second common reason is that the parties may not agree on the
present value of the pension to be offset against other assets (see "What
is a Pension Evaluation" above). A third common reason is to provide
spousal support and/or child support payments from a retirement plan to
an alternate payee (spouse, former spouse and/or dependent of the participant)
by monthly pension payments or a lump sum payment from a retirement account.
A fourth common reason is to pay off marital debt with retirement accounts
at the time of divorce or legal separation."
Spencer Olsen
Senior QDRO Analyst
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