QDRO Plan Administration & Distribution Methods Flashcards

Which type of qualified plan is required by law to offer a qualified joint and survivor annuity (QJSA) as the default form of payment, a feature that QDROs must carefully address?

Answer: Defined benefit pension plans

Defined benefit pension plans (and certain defined contribution plans) are required by ERISA to offer a QJSA as the default, which QDROs must address to protect or waive survivor benefits for the alternate payee.

A QDRO specialist drafting an order for a defined benefit plan should specify whether the alternate payee is to be treated as the participant's surviving spouse for purposes of the pre-retirement survivor annuity (QPSA). Failure to include this provision means:

Answer: The alternate payee will have no pre-retirement death benefit unless the plan's default rules provide one

Without explicit language in the QDRO designating the alternate payee as the surviving spouse equivalent for QPSA purposes, the alternate payee loses the pre-retirement death benefit protection.

When dividing a 403(b) plan through a QDRO, a key difference from a typical 401(k) division is that 403(b) plans may include:

Answer: Annuity contracts issued by insurance companies that require separate assignment procedures

Many 403(b) plans hold individual annuity contracts, and dividing these contracts requires coordinating with the insurance carrier as well as the plan administrator.

In defined contribution plan QDROs, the term 'as of date' refers to:

Answer: The valuation date used to calculate the alternate payee's assigned account balance

The 'as of date' in a defined contribution QDRO specifies the valuation date on which the alternate payee's assigned share is calculated, which is critical for determining the actual dollar amount.

A QDRO for a governmental 457(b) deferred compensation plan differs from a private-sector plan QDRO primarily because:

Answer: Governmental 457(b) plans are not subject to ERISA and require a qualifying domestic relations order under state law

Governmental 457(b) plans are exempt from ERISA, so division requires a state-law domestic relations order that satisfies the plan's own requirements rather than ERISA's QDRO rules.

When an alternate payee elects to roll over their QDRO distribution from a qualified plan to an IRA, the rollover must be completed within how many days to avoid immediate taxation?

Answer: 60 days

The IRS allows a 60-day window to complete a rollover of a QDRO distribution to an IRA or another qualified plan to avoid immediate income tax and early withdrawal penalties.