CDA Retirement & Pension Division 2

Question 1

Which type of retirement plan typically requires a QDRO to divide benefits at divorce?

Accepted Answer

Defined benefit pension plan

Answer

Defined benefit pension plans are employer-sponsored ERISA plans that require a QDRO to divide marital benefits, unlike IRAs which use a transfer incident to divorce.

Question 2

Under a QDRO, the alternate payee spouse is generally taxed on distributions how?

Accepted Answer

At the alternate payee's own tax rate

Answer

A QDRO allows the alternate payee to receive distributions taxed at their own marginal rate, separating the tax liability from the participant.

Question 3

Which valuation method for a defined benefit pension assigns the marital share based on the ratio of marital service years to total service years?

Accepted Answer

Coverture fraction method

Answer

The coverture fraction (time rule) divides the pension by multiplying the benefit by marital years of service divided by total years of service.

Question 4

What happens to a QDRO if the plan participant dies before retirement and no survivor annuity was specified?

Accepted Answer

The alternate payee may lose all benefits if survivor coverage was not addressed

Answer

If the QDRO does not specify pre-retirement survivor annuity coverage, the alternate payee may receive nothing if the participant dies before distributions begin.

Question 5

A 401(k) account valued at $120,000 at the divorce date had a marital contribution of $90,000. If using a net present value offset, the non-employee spouse is typically entitled to approximately:

Accepted Answer

$60,000

Answer

If the entire $120,000 is marital property, the non-employee spouse is entitled to half, or $60,000, under equal division of the marital account.

(CDA) Certified Divorce Advisor Practice Test

(CDA) Certified Divorce Advisor Practice Test

CDA Retirement & Pension Division 2