What is a QDRO/DRO and why do I need one?
A QDRO is a judgment, decree or order for an ERISA-governed retirement plan to pay child support, alimony or marital property rights to a spouse, former spouse, child or other dependent of a participant directly from an employer-sponsored retirement plan. You cannot get money from an ERISA-governed plan without a QDRO, due to the anti-alienation provisions of the plan.s
A DRO is similar to a QDRO but is needed for non-ERISA plans, such as deferred comp, SERP and executive plans and may also be honored by some government, state and municipal plans that are not normally subject to QDRO requirements.
A QDRO allows for a tax-free transfer of retirement assets to a spouse or former spouse for marital property rights. A QDRO can also allow for the payment of child support and/or alimony/maintenance, although payments are usually taxable to the Participant. A DRO also allows for a transfer of retirement and/or executive comp assets but taxes may apply to those distributions.
We provide QDRO services through our affiliated firm QDRO direct, LLC. Through QDRO direct, LLC, we also provide pension and stock option valuations, marital tracing, investment gain/loss analysis and expert witness testimony services.
Please visit QDRO direct, LLC to learn more.