QDRO Compliance & Regulatory Requirements 2 — Questions and Answers
Question 1: Under ERISA, what is the maximum time a plan administrator has to determine whether a domestic relations order is a QDRO?
- 18 months (Correct answer)
- 12 months
- 24 months
- 6 months
Correct answer: 18 months
ERISA section 206(d)(3)(H) gives plan administrators 18 months from the date the first payment would be required to make a QDRO determination.
Question 2: Which federal law primarily governs QDRO requirements for private-sector retirement plans?
- ERISA (Correct answer)
- IRC Section 72
- PBGC regulations
- COBRA
Correct answer: ERISA
ERISA (Employee Retirement Income Security Act of 1974), specifically section 206(d)(3), establishes the QDRO framework for private-sector plans.
Question 3: A QDRO assigns benefits under a retirement plan to an 'alternate payee.' Which of the following can qualify as an alternate payee?
- Spouse, former spouse, child, or other dependent (Correct answer)
- Only a current or former spouse
- Any named beneficiary
- Only minor children
Correct answer: Spouse, former spouse, child, or other dependent
ERISA defines alternate payee as any spouse, former spouse, child, or other dependent of the participant who is recognized by a domestic relations order.
Question 4: When a plan receives a domestic relations order, it must promptly notify which parties?
- The participant and each alternate payee named in the order (Correct answer)
- Only the plan sponsor
- Only the alternate payee
- The IRS and DOL only
Correct answer: The participant and each alternate payee named in the order
Upon receipt, the plan administrator must promptly notify both the participant and each alternate payee of the receipt and its QDRO determination procedures.
Question 5: What happens if a domestic relations order is received during the 18-month determination period and later found NOT to be a QDRO?
- Segregated amounts are paid to the participant as if the order never existed (Correct answer)
- The alternate payee retains the segregated funds
- The plan must petition a court for guidance
- The employer must indemnify the alternate payee
Correct answer: Segregated amounts are paid to the participant as if the order never existed
If the order is ultimately found not to be a QDRO, the segregated amounts (plus any earnings) must be paid to the participant.
Question 6: Which DOL regulation provides model QDRO procedures that plan administrators may adopt?
- 29 CFR § 2530.206 (Correct answer)
- 29 CFR § 2550.404a-1
- 29 CFR § 2520.104-46
- 29 CFR § 2560.503-1
Correct answer: 29 CFR § 2530.206
29 CFR § 2530.206 contains DOL guidance and model procedures for determining whether domestic relations orders are QDROs.
Question 7: A QDRO cannot require a plan to provide benefits in a form NOT otherwise available under the plan, with which notable exception?
- Survivor annuity for the alternate payee even if the participant has not yet retired (Correct answer)
- Lump-sum cash-out regardless of plan terms
- Benefits payable before the plan's earliest retirement age
- Cost-of-living adjustments not in the plan
Correct answer: Survivor annuity for the alternate payee even if the participant has not yet retired
A QDRO may require the plan to pay a survivor annuity to the alternate payee upon the participant's death, even if that form is not otherwise available under the plan.
QDRO Compliance & Regulatory Requirements 2
Under ERISA, what is the maximum time a plan administrator has to determine whether a domestic relations order is a QDRO?