McCormack Family Law | Top Divorce Lawyer | Child Custody & Support

Now that the difference between DROs and QDROs is clear, we can look at a common problem that comes up with Domestic Relations Orders: getting them qualified.

I’ll start with the moral of this episode: make sure the DRO is pre-qualified. Now the story.

Many people think that when a court issues an order –any order– what it says goes, right or wrong. That’s not necessarily the case for a DRO, which is meant to put into effect the court’s division of pension benefits.

In the first place, courts don’t write DROs, so it’s not safe to assume that because the judge signed the DRO it meets the requirements specified by law. Who does write the DRO? The lawyer representing the beneficiary or a professional pension consultant or the beneficiary herself (usually a very bad idea).

Does that mean it’s going to be qualified and go into effect? No telling. The language ERISA uses and requires is pretty arcane. If the structure and language of the DRO are not in proper ERISAspeak, the DRO will not be qualified.

Take Harry Band from episode 1. He has a defined benefit pension plan. In his case, the Domestic Relations Order did not pass muster with the pension plan administrator, who notified him, his counsel, and Mary Band after the divorce was final. 

Time went by. They wrote another order and took it to the judge, who issued it as a new DRO. Again, the plan refused to qualify it. More time went by. People were busy. Harry Band retired and took his pension.

Mary Band is not receiving her half of the marital portion of those benefits. Now it’s starting to get costly for her to pursue it. Not pointless, by any means. Just costly for everyone– Mary and Harry.

There’s a relatively simple way to avoid this situation. First, get your pension documents together early in the divorce process.

Why? Because it gives your lawyer the information and time needed to draft a DRO and get it pre-qualified by running it by the pension plan administrator before the judge sees it. If the plan administrator is not going to qualify it, they’ll say why not, quite specifically.  Then the DRO can be rewritten and reviewed again… and again… until it qualifies.

That’s how to turn a DRO into a QDRO in time to put smoothly into effect the intention of the court: to make sure the plan issues two checks starting at retirement, one for Harry and one for Mary’s half of the marital portion.

But there’s more than one wrong way to write a DRO. That’s episode 3.

Tags: divorce and pensions, DRO, QDRO

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