QDRO Client Communication & Case Management 2 — Questions and Answers
Question 1: When a client asks whether the QDRO will be 'approved' by the plan, what is the most accurate response?
- Guarantee approval since QDROs are legally required
- Explain that the plan administrator reviews the order and may require amendments before approving it (Correct answer)
- Tell the client approval depends solely on the divorce attorney
- Advise the client that only the court can approve or reject the QDRO
Correct answer: Explain that the plan administrator reviews the order and may require amendments before approving it
Plan administrators have the authority to review and reject QDROs that do not conform to plan terms, and revisions may be needed before the plan qualifies the order.
Question 2: A client is confused about why their QDRO specialist needs a copy of the divorce decree. What is the primary reason for this request?
- To verify the client's identity
- To ensure the QDRO provisions are consistent with and do not exceed the terms of the divorce agreement (Correct answer)
- To file with the IRS on the client's behalf
- To calculate child support obligations
Correct answer: To ensure the QDRO provisions are consistent with and do not exceed the terms of the divorce agreement
The QDRO must reflect the property division agreed upon in the divorce decree without awarding benefits beyond what was negotiated.
Question 3: Which of the following best describes the specialist's role when a client and their ex-spouse disagree on QDRO language?
- Advocate solely for the client who retained them
- Act as a neutral drafter implementing the agreed-upon terms from the divorce decree (Correct answer)
- Mediate the dispute and propose a new division
- Refuse to draft until both parties sign a fee agreement
Correct answer: Act as a neutral drafter implementing the agreed-upon terms from the divorce decree
A QDRO specialist drafts the order to reflect the parties' agreed terms and does not advocate for either side when acting as a neutral drafter.
Question 4: A client calls stating they received a notice that their QDRO was rejected by the plan. What should the specialist do first?
- Advise the client to file a complaint with the Department of Labor
- Obtain a copy of the rejection notice to identify the specific deficiencies cited by the plan (Correct answer)
- Immediately draft an amended QDRO without reviewing the rejection
- Instruct the client to contact the plan administrator directly and handle it themselves
Correct answer: Obtain a copy of the rejection notice to identify the specific deficiencies cited by the plan
Reviewing the plan's rejection notice identifies the exact deficiencies that must be corrected before redrafting the amended QDRO.
Question 5: What is the most important reason to obtain the plan's Summary Plan Description (SPD) early in the QDRO drafting process?
- To determine the client's tax filing status
- To understand the plan's specific rules, benefit options, and permissible QDRO language (Correct answer)
- To verify the plan administrator's identity
- To establish the client's employment history
Correct answer: To understand the plan's specific rules, benefit options, and permissible QDRO language
The SPD contains the plan rules that govern what a QDRO may and may not order, making it essential for drafting a compliant order.
Question 6: When communicating a timeline to a client, which factor most commonly causes unexpected delays in the QDRO process?
- Delays in the client providing their Social Security number
- Plan administrator review periods, which can range from 18 to 90 days or more (Correct answer)
- Court filing fees not paid promptly
- Errors in the client's mailing address
Correct answer: Plan administrator review periods, which can range from 18 to 90 days or more
Plan administrators are allowed a reasonable period—often 18 months or a defined plan-specified window—to review and qualify a QDRO, which is a primary source of delay.
Question 7: A client asks whether they can receive a lump-sum distribution from the alternate payee's share immediately after the QDRO is qualified. What must the specialist clarify?
- A lump-sum is always available once the QDRO is qualified
- Distribution options depend on the plan's terms and the triggering events specified in the QDRO (Correct answer)
- The alternate payee must wait until the participant retires regardless of the QDRO language
- Only monthly annuity payments are permitted under federal law
Correct answer: Distribution options depend on the plan's terms and the triggering events specified in the QDRO
Whether a lump-sum is available and when depends on the specific plan rules and what distribution triggers are written into the QDRO.
QDRO Client Communication & Case Management 2
When a client asks whether the QDRO will be 'approved' by the plan, what is the most accurate response?