QDRO QDRO Plan Administration & Distribution Methods

Question 1

When a QDRO assigns a portion of a defined benefit plan to an alternate payee, which distribution option allows the alternate payee to receive benefits immediately upon the participant's earliest retirement eligibility date?

Accepted Answer

Separate interest approach

Answer

The separate interest approach gives the alternate payee an independent benefit that can commence at the participant's earliest retirement eligibility date, regardless of when the participant actually retires.

Question 2

Under the shared payment approach in a defined benefit QDRO, when do the alternate payee's benefits cease?

Accepted Answer

Upon the participant's death

Answer

Under the shared payment approach, the alternate payee receives a share of the participant's actual benefit payments, so benefits cease when the participant dies unless survivor coverage is specified.

Question 3

A plan administrator receives a QDRO that assigns a specific dollar amount rather than a percentage of the participant's account. This type of assignment in a defined contribution plan is known as:

Accepted Answer

Fixed dollar assignment

Answer

A fixed dollar assignment specifies an exact monetary amount to be transferred to the alternate payee's separate account from the participant's defined contribution plan balance.

Question 4

Which method of dividing a defined benefit pension uses a formula that reflects only the marital portion of the benefit based on years of service during the marriage relative to total years of service?

Accepted Answer

Coverture fraction

Answer

The coverture fraction multiplies the total benefit by the ratio of marital service years to total service years to isolate the portion earned during the marriage.

Question 5

In a defined contribution plan QDRO, what is the typical treatment of investment gains and losses on the alternate payee's assigned amount between the date of divorce and the date of segregation?

Accepted Answer

Prorated gains and losses are applied to the alternate payee's share

Answer

Most QDROs for defined contribution plans require that the alternate payee's assigned share be adjusted for prorated investment gains and losses from the assignment date through segregation.

(QDRO) Certified Qualified Domestic Relations Order Specialist Practice Test

(QDRO) Certified Qualified Domestic Relations Order Specialist Practice Test

QDRO QDRO Plan Administration & Distribution Methods