QDRO Compliance & Regulatory Requirements 3

Question 1

IRC Section 414(p) defines a QDRO. Which of the following is NOT one of the required elements it must specify?

Accepted Answer

The social security number of each alternate payee's attorney

Answer

IRC 414(p)(2) requires the order to specify the participant and alternate payee addresses, benefit amount, and period, but does not require the attorney's SSN.

Question 2

Under IRS rules, early distributions paid to an alternate payee from a qualified plan pursuant to a QDRO are exempt from which penalty?

Accepted Answer

The 10% early distribution penalty under IRC § 72(t)

Answer

IRC § 72(t)(2)(C) exempts QDRO distributions to an alternate payee from the 10% early distribution penalty, regardless of the payee's age.

Question 3

Who bears the income tax liability when an alternate payee receives a distribution from a defined benefit plan pursuant to a QDRO?

Accepted Answer

The alternate payee pays the tax on amounts they receive

Answer

The alternate payee is treated as the distributee for tax purposes and is responsible for income taxes on QDRO distributions they receive.

Question 4

A QDRO is prohibited from requiring a plan to pay increased benefits determined on an actuarial basis. What does this mean in practice?

Accepted Answer

The order cannot increase the total plan liability beyond what was already accrued

Answer

The plan cannot be required to pay more in aggregate than the benefit already accrued — the QDRO divides existing benefits rather than creating new ones.

Question 5

For governmental plans (e.g., state pension plans), which legal framework governs domestic relations orders instead of ERISA?

Accepted Answer

IRC § 414(p) and applicable state law

Answer

Governmental plans are exempt from ERISA but must comply with IRC § 414(p) and relevant state statutes when processing domestic relations orders.

(QDRO) Certified Qualified Domestic Relations Order Specialist Practice Test

(QDRO) Certified Qualified Domestic Relations Order Specialist Practice Test

QDRO Compliance & Regulatory Requirements 3