Qualified Domestic Relations Order (QDRO) Handbook, Third Edition

Widely recognized as the definitive work on the topic, Qualified Domestic Relations Order Handbook, written by Gary A. Shulman, turns the most confusing QDRO issues into clear answers and step-by-step guidelines.

Drawing on years of experience, Shulman steers you past the QDRO pitfalls, with expert tips, drafting checklists, and even a special chapter on 29 areas of high liability risk. In this volume you'll find:

• Comprehensive model separation agreement language that you can incorporate directly into decrees to ensure that all of the QDRO issues are properly addressed
• Guidance on how to "revoke" a QDRO that has already been approved by the plan administrator
• Guidance on how to draft and administer child support QDROs
• Dozens of tips on how to detect potentially hazardous deficiencies in the "company model" QDRO
• Detailed instructions and models for dividing federal and state government plans

Why waste time and risk costly errors by working with scattered resources and partial information?

With the Handbook, you'll save time as well as trouble. It provides fast, definitive resolutions to all your QDRO questions. And because it's designed for both attorneys and plan administrators, it helps you anticipate questions throughout the entire drafting and approval process. That means less guesswork, fewer delays and most importantly, less liability exposure.

Qualified Domestic Relations Order Handbook provides everything you need to draft or administer QDROs promptly and accurately, with a superb toolkit of resources for attorneys and administrators, including:

• 21 QDRO models for all types of plans and conditions
• Step-by-step drafting guidelines
• Model language for specific circumstances
• Model discovery letters for requesting retirement plan information
• Sample correspondence
• Drafting and compliance checklists
• Company policies and procedures manual
• Appendices of related statutory provisions
• And much more!

Qualified Domestic Relations Order Handbook has been updated to include:

• A new section on understanding how to draft QDROs for the Big Three Automakers - General Motors, Ford, and Chrysler
• A new section with a discussion of how top lawyers protect themselves against claims from their clients with the use of a "termination letter"
• A detailed analysis of the different approaches used (and recommended language) in drafting QDROs in cases where the participant has an outstanding plan loan
• A detailed discussion of who should be responsible for the costs associated with joint and survivor annuities under a defined benefit QDRO
• A discussion of the new approach by the federal Thrift Savings Plan (TSP) of providing former spouses with "actual" investment gains/losses rather than attempting to use the old G-Fund approach

• 1. INTRODUCTION TO QDROs
  • Employee Retirement Income Security Act
  • Survivor Annuity Requirements
  • Retirement Equity Act
  • Definition of QDRO
  • Basic Criteria Necessary for QDRO
  • Failure to Understand QDRO - Lessons Learned "The Hard Way"
• 2. BRIEF ANALYSIS OF REQUIRED QDRO CRITERIA
  • Names and Mailing Addresses
  • Amount or Percentage of Participant's Benefits
  • Number of Payments or Period to Which Order Applies
  • Each Plan to Which Order Applies
  • Provision of Child Support, Alimony Payments, or Marital Property Rights
  • Pursuant to State Domestic Relations Law
  • No Alteration of Benefits Provided Under Plan
  • No Benefits Required to Be Paid to Another Alternate Payee
  • The New Standard of Care for QDROs
  • The Seven Critical Areas to Address in Every QDRO
  • Growth Protection
  • Survivorship Protection
  • Early Retirement Subsidies, Supplements, and Post-Retirement Cost of Living Adjustments
  • Anti-Circumvention Language
  • Explaining the QDRO to Your Client
  • The Separation Agreement
  • Following Through with the Plan Administrator
  • Obtaining Company Pre-Approval
  • Judges' Views of QDROs
• 3. THE SEPARATION AGREEMENT
  • Do Not Shortchange Your Client's QDRO Rights
  • Incorporate the QDRO by Reference
  • Protecting the Alternate Payee's Benefits Against Actions by the Participant
  • Merger of Benefits with Other Retirement Systems
  • Reservation of Jurisdiction and the Recharacterization of Benefits
  • How to Interpret that "Old" Separation Agreement Language If You Represent the Alternate Payee
• 4. DRAFTING QDROs FOR DEFINED BENEFIT PENSION PLANS
  • The Mysterious Defined Benefit Pension Plan
  • Pension Plans Come in Many Varieties
  • Preparing QDROs for Money Purchase Pension Plans (When Coverture May Not Apply)
  • Preparing QDROs for Floor-Offset Arrangement Pension Plans
  • Remember the Coverture
  • Distinguish Between Separate Interest and Shared Payment Approach
  • The Critical Early Retirement Subsidy
  • Do Not Forget the Boilerplate
  • Dissecting a Pension Plan QDRO
  • How to Draft QDROs for Plans That Utilize the "Severed" Approach for Their Separate Interest QDROs
• 5. COVERTURE-BASED QDROs
  • Determining the "Marital Portion" of the Pension
  • The Faulty Subtraction Method
  • Coverture Formula: The Recommended Approach
  • Mechanics of the Coverture Formula
  • The Two-Wives Dilemma
  • How to Adjust Coverture When Alternate Payee Commences Benefits Before Participant Retires
  • Model Coverture Language
  • Problems with the Berrington Approach
  • Bye-Bye Berrington
  • Do Not Be Fooled by the Frozen Coverture Approach
  • Recognizing Bad Coverture
  • Coverture for Military Plans: Years Versus Points Approach
  • Case Law
• 6. SEPARATE INTEREST AND SHARED PAYMENT QDROs
  • ThereAre Just Two Ways to Draft QDROs for Pension Plans
  • Understanding the "Separate Interest" Approach (Where Benefits Are Based on the Alternate Payee's Life Expectancy)
  • Understanding the "Shared Payment" Approach (Where Benefits Are Still Based on the Participant's Life Expectancy)
• 7. SURVIVORSHIP CONSIDERATIONS
  • Survivorship Considerations for QDROs
  • Should QDROs Contain Survivorship Provisions?
  • Payment of Survivorship Coverage Under a QDRO
  • Securing Survivorship Rights in the QDRO
  • QDRO-Express: Securing the Alternate Payee's Survivorship Rights Immediately If QDRO Issues Are Still Pending
  • Death of Participant Before the QDRO Is Drafted
  • The Necessity of Nunc Pro Tunc QDROs
  • Death of the Alternate Payee
  • The Contingent Alternate Payee
  • Case Law Relating to QDRO Survivorship Issues
  • Nunc Pro Tunc QDRO Granting Survivor Rights to Alternate Payee After Death of Participant
  • Disposition of 401(k) Benefits When Participant Forgets to Change Beneficiary Designation: U.S. Supreme Court Decision in Kennedy v. DuPont
• 8. EARLY RETIREMENT SUBSIDIES, SUPPLEMENTS, AND BUYOUTS
  • The Early Retirement Subsidy
  • Dangers of the Diminishing Early Retirement Subsidy
  • The "Equitable" Approach to Calculating the Alternate Payee's Share of the Early Retirement Subsidy
  • Model QDRO Language to Award Early Retirement Subsidy
  • Temporary and Supplemental Benefits
  • Early Retirement Window Programs (aka Limited "Buy-Out" Offers)
  • QDROs for Voluntary "Contributory" Pension Plans
• 9. MODEL QDROs
  • Model Separate Interest, Coverture-Based QDRO for Defined Benefit Pension Plans
  • Model Separate Interest, Fixed-Dollar QDRO for Defined Benefit Pension Plans
  • Model Separate Interest, Fixed-Percentage QDRO for Defined Benefit Pension Plans
  • Model Shared Payment, Coverture-Based QDRO for Defined Benefit Pension Plans
  • Model Shared Payment, Fixed-Dollar QDRO for Defined Benefit Pension Plans
  • Model Shared Payment, Fixed-Percentage QDRO for Defined Benefit Pension Plans
• 10. HOW TO DRAFT QDRO IF PARTICIPANT IS ALREADY RETIRED
  • Importance of Drafting QDRO At Time of Divorce
  • Get the QDRO Executed Right Away Before Submission to Plan Administrator
  • Can Only Use Shared Payment QDRO
  • It May Be Too Late to Secure Survivorship
  • Alternate Payee Can Receive Payments Only on a Prospective Basis
  • Recoupment of Lost Payments to Alternate Payee
  • Confirm Survivorship Status of Alternate Payee
  • Automatic Reversion of Benefits to Participant
  • Important QDRO Clauses When Participant Already Retired
• 11. QDROs FOR DEFINED CONTRIBUTION PLANS
  • Defined Contribution Plans Contain Individual Accounts for All Plan Participants
  • Coverture Formulas Do Not Apply
  • Retroactive Assignment Dates Are Becoming More of a Problem
  • Administrative Fees
  • Are QDROs Required for IRAs?
  • Dissecting a 401(k) Plan QDRO
  • Model QDROs for Defined Contribution Plans
• 12. HANDLING THE "EXECUTIVE" DIVORCE
  • Special Care and Handling Required
  • "Nonqualified" to "Qualified" Plan Transfers
• 13. DETECTING DEFICIENCIES IN THE COMPANY MODEL QDRO
• 14. UNDERSTANDING CASH BALANCE PENSION PLANS
  • Inherent Dangers of Cash Balance Plans
  • Tips on Drafting QDROs for Cash Balance Plans
• 15. USING QDROs TO OBTAIN PAST-DUE CHILD SUPPORT
  • Legislative History of Child Support QDROs
  • QDROs for Child Support
  • Taxes and Child Support QDROs
  • Tax Consequences for Participant When Child Is Named as the Alternate Payee
  • "Grossing-Up" the QDRO Distribution Amount Under a Child Support QDRO
• 16. ERRORS AND OMISSIONS THAT MAY GIVE RISE TO MALPRACTICE ACTIONS
  • Sure-Fire Ways to End Up in a Malpractice Lawsuit
  • Actions that May Not Rise to the Level of Full-Blown Malpractice, but Serious Nonetheless
  • Actions that Are Not So Bad, but the Attorney Should Know Better
  • Some Esoteric QDRO Issues
  • Top 15 Reasons Why QDROs Failed in 2006
  • Actual QDRO Clauses That Were Rejected by Plan Administrator During 2007
  • Common Omissions
• 17. ATTORNEY'S CHECKLIST ON QDROs
• 18. QUESTIONS AND ANSWERS ON QDROs
• 19. DEALING WITH THE PLAN ADMINISTRATOR
  • Attorneys Must Be Nonadversarial with Plan Administrator
  • The Participant's ERISA Rights
  • Maintaining Written Procedural Requirements for QDROs
  • Determining Qualified Status of QDRO
  • The 18-Month Myth for Reviewing QDROs
  • Administrative Fees for Processing QDROs
  • Administrators and Their Employees
  • Administrators and Alternate Payees
  • Problems in Discovery
  • Reviewing and Accepting QDROs
  • Outstanding Loan Balances, Withdrawals, or Distributions
  • Events That May Enhance Early Retirement Benefits
  • Determine All Plans of Coverage
  • Constructive Notice of QDRO
  • Using Model QDRO Language
  • Administrator's Approval and Signature
  • Administrator's Joinder to the Case
  • Making a Distribution Without a QDRO
  • Permitting Parties to Submit Clarifying Letters
  • Providing ERISA Appeal Rights
  • Who Determines Whether an Order Is a QDRO?
  • According to the DOL, Income Withholding Notice May Qualify As a QDRO
  • Is the Plan Required to Determine the Validity of the QDRO?
  • How to Revoke a QDRO That Has Been Approved by the Plan Administrator
• 20. DEPARTMENT OF LABOR QDRO GUIDELINES: OBLIGATIONS OF PLAN ADMINISTRATORS
  • Administration of QDROs: Determining Qualified Status and Paying Benefits
  • Drafting QDROs
  • Interim Final Rule Relating to Time and Order of Issuance of Domestic Relations Orders
• 21. DIVIDING IRA BENEFITS
  • Some IRA Administrators Require QDROs
  • Model Letter of Instruction for Dividing IRA Benefits
• 22. ROLE OF THE PLAN ADMINISTRATOR IN REVIEWING QDROs
  • Importance of Well-Documented QDRO Procedures (Your "QDRO Compliance Manual")
  • Initial Receipt of "Executed" QDRO: What Do We Do First and When Do We Start Segregating Benefits?
  • Initial Receipt of "Draft" Domestic Relations Order
  • Timing Requirements for Approving Order as QDRO
  • Tips for Quick Review of Defined Contribution Plan QDROs
  • Tips for Quick Review of Defined Benefit Pension Plan QDROs
  • What Plan Administrators Should Do If an Order Does Not Qualify as a QDRO
  • Actions to Be Taken by the Plan Administrator Once a QDRO Is Qualified: The "Interpretation Letter" and Satisfaction of ERISA Appeal Rights
  • Dealing with Actuaries and Third-Party Administrators
  • How an Early Retirement Subsidy Affects the Benefits of the Alternate Payee
  • Administering "Separate Interest" QDROs
  • Administering "Shared Payment" QDROs
  • Administering QDROs If the Participant Is Already Retired
  • What Should the Plan Administrator Do If the Participant Dies Before the Order Is Qualified?
  • What Happens If the Alternate Payee Dies?
  • QDRO "Express Administration" Form — A Time/Money-Saving Tool
  • Other QDRO Forms
  • Amending QDRO Procedures to Allow for Allocation of QDRO Expenses from Participant's Accounts
  • Maintaining a "Freeze" on the Participant's Account(s) Is Critical to Avoiding Liability Exposure
• 23. MODEL COMPANY QDRO COMPLIANCE MANUAL
• 24. PLAN ADMINISTRATORS’ QDRO REVIEW CHECKLISTS
  • The Importance of a QDRO Review Checklist
  • Plan Administrators' QDRO Review Checklist for Defined Benefit Pension Plan
  • Plan Administrators' QDRO Review Checklist for Defined Contribution Plan
• 25. COMMON FLAWS IN DEFINED BENEFIT PLAN QDROs
  • Improper Plan Terminology
  • Bad Coverture
  • Incomplete or Conflicting Survivorship Provisions
  • Shared Payment Versus Separate Interest Inconsistencies
  • Improper Designation of Beneficiaries
  • Problems When Participant Is Retired
  • Examples of Vague and Deficient Clauses
• 26. COMMON FLAWS IN DEFINED CONTRIBUTION PLAN QDROs
  • Improper Plan Terminology
  • How to Treat Vesting Status in a 401(k) QDRO
  • Invalid Retroactive Dates of Assignment (the "Magic Date")
  • Silence on Issues of Gains/Losses
  • No Allocation of Benefits
  • Commencement Date Problems
  • Examples of Vague and Deficient QDRO Clauses
• 27. TESTING YOUR STAFF'S KNOWLEDGE OF QDROs
  • Case Studies to Test Your Staff's Knowledge of QDROs
  • Case Study "A" of Hypothetical Pension Plan QDRO Where Participant Is Actively Employed
  • Critique of Case Study "A"
  • Case Study "B" of Hypothetical Pension Plan QDRO Where Participant Is Actively Employed
  • Critique of Case Study "B"
  • Case Study "C" of Hypothetical QDRO for Pension Plan Where Participant Is Already Retired
  • Critique of Case Study "C"
  • Case Study "D" of Hypothetical QDRO for 401(k) Plan
  • Critique of Case Study "D"
• 28. STREAMLINING ADMINISTRATION TECHNIQUES
  • Interpret Vague Language by Adopting Default Criteria
  • Permit Parties to Submit Clarifying Letters
  • Permit Immediate Distributions for 401(k) QDROs
  • Eliminate Acceptance of Retroactive Dates of Assignment
  • Provide ERISA Appeal Rights
  • Provide Model QDRO Language
• 29. GUIDE TO OUTSOURCING QDRO BURDEN
  • Should Your Company "Outsource" QDROs or Handle Them In-House?
  • Who Should You Hire to Review Your Company's QDROs?
  • Sample Request for Proposal ("RFP") to Analyze Firm's Ability to Handle Your QDROs
• 29A. HOW TO ADMINISTER CHILD SUPPORT QDROs
  • QDROs Are Becoming More Popular As a Tool to Collect Past-Due Child Support
  • Administering "Defined Contribution" Child Support QDROs
  • Administering "Defined Benefit" Child Support QDROs
  • Twenty Percent Tax Withholding for Former Spouse When Former Spouse Is Named as Alternate Payee
  • Ten Percent Tax Withholding for Participant When Child Is Named as Alternate Payee
  • Allow Child Support Payments to Be Made Directly to Support Enforcement Agency
• 30. DIVIDING CSRS AND FERS PENSIONS
  • OPM Guide
  • Definitions
  • Employee Annuity
  • Refund of Employee Contributions
  • Former Spouse Survivor Annuities
  • Miscellaneous Issues
  • Model Court Order Acceptable for Processing Under the Civil Service Retirement System
  • Model Court Order Acceptable for Processing Under the Federal Employees Retirement System
  • A Dangerous Loophole in COAPs for Dividing Civil Service Pensions (Lost Survivorship)
  • What Is the Thrift Savings Plan?
  • Model TSP Qualifying Retirement Benefits Court Order
• 31. DIVIDING MILITARY RETIRED PAY
  • Definitions
  • The 10/10 Rule
  • Maximum Payments to Former Spouse
  • Military Uses Shared Payment Approach Only
  • Servicemembers' Civil Relief Act
  • Survivor Benefit Plan Coverage for Former Spouse
  • Instructing DFAS on the Amount of SBP Coverage to Be Elected
  • Securing SBP Coverage for Former Spouse if Member Fails to Make the Election
  • Deemed Election of Former Spouse Coverage
  • Termination of SBP Surviving Spouse Coverage upon Remarriage of Former Spouse Before Age 55
  • Anti-Circumvention Language
  • The Military's Version of Early Retirement: VSI and SSB Benefits - Should They Be Considered as Marital Property Subject to Equitable Distributions?
  • Model Military Qualifying Court Order, for Active Members
  • Model Military Qualifying Court Order, for Reservists
  • Model Military Qualifying Court Order, for Retired Members
  • Model Military Qualifying Court Order, for Active (Coast Guard) Members
  • Model Military Qualifying Court Order, for Retired (Coast Guard) Members
  • Correspondence from DFAS Regarding Drafting of Court Orders to Divide Military Retired Pay
  • DFAS Answers to Frequently Asked Questions
  • Obtaining Member Information Through Use of Military Form SF-180
  • Model "Separation Agreement" Language for Military Retirement Benefits
• 32. DIVIDING RAILROAD PENSIONS
  • Tier I Annuity IsNot Divisible by Court Order
  • Tier II Annuity Is Divisible by Court Order
  • Other Divisible Benefits: Vested Dual Benefit Payments, Supplemental Annuity, and Overall Minimum Increase
  • Division of Disability Annuities Are Now Permitted
  • No Survivor Rights (but Former Spouse May Be Entitled to Divorced Spouse Annuity)
  • Do Not Overlook Other Private Pension Plan Coverage
  • Actions Taken by the Board Once in Receipt of Your Court Order
  • Model Court-Ordered Language to Divide Divisible Portion of Railroad Retirement Benefits
  • Attorneys' Guide Distributed by the Railroad Retirement Board
• 33. DIVIDING STATE GOVERNMENT PENSIONS WHEN QDROs ARE NOT PERMITTED
  • Protecting the Rights of the Nonparticipant Spouse
  • Section 457 Plans Now Accept QDROs
  • New Judgment Entry Language and Comprehensive DRO to Divide Pensions Under a State Government Pension Plan Exempt from ERIS
• 34. MODEL QDROS ISSUED BY THE PBGC
  • Model QDROs Issued by the Pension Benefit Guaranty Corporation
• 35. STATE IV-D GUIDE TO DRAFTING QDROs TO OBTAIN PAST-DUE CHILD SUPPORT
  • When QDROs Cannot Be Used
  • How Can I Be Sure That Employee Will Not Take His Money and Run?
  • Can My Client Get the QDRO Money Now?
  • Has the NCP Built Up Another Arrearage? Just Do Another QDRO
  • The QDRO's Reach Is Nationwide
  • The Magic of www.freeERISA.com
  • The All-Important Data Match
  • Tips on State IV-D QDROs for Defined Contribution Plans
  • Tips on State IV-D QDROs for Defined Benefit Pension Plans
  • Be Sure QDRO Payments Go to State Disbursement Unit
  • Lawyers Within State IV-D Must Appreciate Power of Plan Administrator
  • Tax Implications of QDROs for Child Support
  • One QDRO Can Handle All of Participant's Children
  • The Company Model QDRO Must Be Modified
  • Coordinate with Your State's Judges and Magistrates
  • Model Defined Contribution Plan Child Support QDRO for Use by State IV-D Support Enforcement Agency
  • Model Defined Benefit Plan Child Support QDRO for Use by State IV-D Support Enforcement Agency
• 36. INTRODUCTION TO QMCSOs
  • Criteria for a Qualified Medical Child Support Order
  • Model QMCSO Compliance Manual
  • Additional Procedures: Interim Health Care Coverage
  • Common Concerns Regarding QMCSOs
  • Main Reasons for Failure of a QMCSO to Qualify
• 37. IMPEDIMENTS TO THE ENFORCEMENT OF QMCSOs
  • The National Medical Support Notice
  • Understanding "Part A: Notice to Withhold for HealthCare Coverage"
  • Employer Responsibilities If Family Health Care Coverage Is Available for the Alternate Recipient Children
  • The QMCSO Process When Participant Children Live in a Different Jurisdiction Than the Participant
  • What Is a Waiting Period?
  • Duration of Coverage as a "Dependent" of Employee
  • What If the Employee Terminates? (A New Notification Requirement for Employer)
  • What If Some Factual Information on Part A Is Missing?
  • Understanding Part B: "Medical Support Notice to Plan Administrator"
  • Obligations of the Plan Administrator
  • Analysis of Part B Checklist
  • Notification Requirements If Coverage Is Available
  • Presumptive Qualification of National Medical Support Notice
  • Effective Date
  • Unlawful Refusal to Enroll
• Afterword: Legislative QDRO Changes the Author Would Like to See Happen