Retirement & Pension Division Flashcards
7 cards from real CDA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Retirement & Pension Division flashcards as text
A Roth IRA owned by one spouse during marriage is divided in divorce by:
Answer: Executing a transfer incident to divorce under IRC §408(d)(6)
Roth IRAs and traditional IRAs are divided via a transfer incident to divorce under IRC §408(d)(6), which is a non-taxable, non-penalized direct retitling to the receiving spouse's IRA.
Which of the following plan types is NOT subject to ERISA and therefore cannot be divided by a QDRO?
Answer: State government 403(b) or 457(b) plan
Government and church plans are exempt from ERISA; state and local government 403(b) and 457(b) plans use state-specific domestic relations orders, not QDROs.
When valuing a pension for divorce, the discount rate used should generally reflect:
Answer: A risk-free or risk-adjusted rate appropriate to the certainty of the benefit
A defined benefit pension is a relatively secure obligation, so the discount rate should reflect a risk-appropriate rate that accounts for the near-certainty of the promised payments.
A spouse who is the alternate payee and receives a QDRO distribution should be advised that if they roll it into their own IRA:
Answer: They permanently lose the QDRO early-withdrawal penalty exemption for that money
Once QDRO funds are rolled into an IRA, the special §72(t)(2)(C) exemption from the 10% early withdrawal penalty no longer applies to those funds.
In a community property state, pension benefits accrued during marriage are generally:
Answer: Owned 50/50 by both spouses as community property
In the nine community property states, retirement benefits earned during marriage are community property owned equally by both spouses.
The 'separate interest approach' in a QDRO gives the alternate payee:
Answer: A segregated independent benefit that can start at a different time than the participant's benefit
Under the separate interest approach, the alternate payee's benefit is segregated and can commence at the alternate payee's own retirement age, independent of the participant.
A CDA reviewing a QDRO draft should verify that it addresses which critical death-related risk?
Answer: Pre-retirement survivor annuity (PRSA) protection for the alternate payee
A properly drafted QDRO must address pre-retirement survivor annuity rights to protect the alternate payee if the participant dies before retirement.