QDROs and Retirement Orders in Divorce

Willick Law Group QDRO & Retirement Benefit Division Services

Millions of Americans are covered by employer sponsored pension plans, both public and private. Retirement benefits are usually the most valuable asset accrued during a marriage. For this reason, whether and how to divide a pension plan in a divorce is critical.

It can also be complex. While the division of marital property generally is governed by state domestic relations law, any assignments of pension interests must also comply with federal law. For private company pensions, that means the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code. For federal government employee pensions, it means the Civil Service and Federal Employees Retirement Systems (CSRS & FERS) pursuant to Title 5 of the United States Code, and for military retirement benefits it means 10 U.S.C. § 1408. When State Public Employees Retirement System (PERS) benefits are involved, the statutes at issue are Chapter 286 of the NRS.
Each of these retirement systems has detailed rules, policies, and procedures.

What is a Qualified Domestic Relations Order (QDRO)?

An order dividing a private pension under ERISA is called a “qualified domestic relations order” or QDRO. A QDRO is a domestic relations order that creates or recognizes the right of an “alternate payee” to receive all or a portion of the benefits payable with respect to participant under a pension plan. The governing statutes require certain language and information in such orders, and prohibits certain other terms. Additionally, every pension plan can have its own rules that have to be followed in order to divide benefits.

 

Do All Pensions and Retirement Funds Require QDROs?

No. Some kinds of benefits – such as IRA accounts and Thrift Savings Plan (TSP) accounts – can be divided with just proper language in a divorce decree. And if the employer is not a private company, then ERISA does not apply, and instead of a QDRO, a different kind of order is required to divide the benefits. A “court order acceptable for processing,” or COAP, is required for dividing federal employees’ pension benefits. And still other special kinds of orders are required for military and Nevada PERS cases.

 

Why choose the Willick Law Group to complete your QDRO, COAP, PERS QDRO or Military Retired Pay Division Order?

Marshal Willick, Esq., has over 25 years of experience dealing with a variety of complex pension plans, has written books and articles in the field, and often teaches other lawyers how to deal with pension benefits in divorce cases. We do not ship retirement benefit division orders out for production by third parties, as many law offices do – often dangerously entrusting this critical matter to non-lawyers, and in the process leaving their clients exposed to loss, and themselves liable if anything goes wrong.

Instead, we draft, submit, get approved, and file necessary retirement division orders as part of the case in which those benefits are at issue. If possible, the retirement order should be completed and filed at the same time as the divorce decree, or as soon afterward as possible.

Many attorneys find drafting a QDRO, COAP, or similar document to be demanding and time consuming because of the strict requirements of each retirement system. Issues such as survivor benefits, cost of living adjustments, and early retirement subsidies, etc., can be intricate, and it is very easy for someone who does not deal with such matters all the time to miss the details, or get them wrong. Unfortunately, even a small mistake can have massive financial consequences for the parties, because pensions are often such a large part of the assets addressed in divorce.

To address these challenges, the Willick Law Group prepare these orders for other firms, or individuals who have completed their divorce, but did not obtain the necessary order with which to divide their pensions, for a fixed fee.  Much more detail is posted on our QDRO Masters website.  Several articles, forms, and other material is posted on our Military Retirement Benefits page.

Learn About Military Retirement Benefits

Cost

$900 for drafting of an order, presuming all necessary information is supplied (we have a checklist and form to make clear what information is necessary).

$400 per hour for any changes to the order after drafting, or in time spent obtaining the information necessary to do the drafting work if all necessary information is not supplied.

Links to Other Web Sites

 

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Frequently Asked Questions

What is a qualified domestic relations order (QDRO)?
A QDRO is a court order that divides a private pension or retirement plan governed by ERISA at divorce. It is a domestic relations order that creates or recognizes the right of an ‘alternate payee’, usually the former spouse, to receive all or part of the benefits payable to the plan participant. Federal law requires specific language and information in a QDRO and prohibits certain terms, and each pension plan also has its own rules that must be followed before it will accept the order.
Do all retirement accounts require a QDRO in a divorce?
No. Some accounts, such as IRAs can be divided with proper language in the divorce decree itself. A QDRO is required only for private employer plans covered by ERISA. If the employer is a government, ERISA does not apply and a different order is needed: a Court Order Acceptable for Processing (COAP) for federal civil service pensions, a military retired pay division order for military retirement, and a special order for Nevada PERS benefits.
What is a COAP and how is a federal government pension divided in divorce?
A Court Order Acceptable for Processing, or COAP, is the order used to divide a federal employee’s pension under the Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS). Because federal pensions are governed by Title 5 of the United States Code rather than ERISA, a standard QDRO will not work; the Office of Personnel Management requires a COAP that meets its own rules. People searching for a ‘FERS QDRO’ need a COAP, and the federal TSP is divided separately.
Which laws govern dividing a pension in a Nevada divorce?
Division of marital property is governed by Nevada domestic relations law, but any assignment of pension benefits must also comply with the federal or state law that governs the plan. Private company pensions fall under ERISA and the Internal Revenue Code; federal civil service pensions (CSRS and FERS) under Title 5 of the United States Code; military retirement under 10 U.S.C. 1408; and Nevada Public Employees’ Retirement System (PERS) benefits under NRS Chapter 286. Each system has detailed rules, policies and procedures.
When should a QDRO be prepared in a Nevada divorce?
Ideally the retirement division order is drafted, approved and filed at the same time as the Decree of Divorce, or as soon afterward as possible. Willick Law Group drafts its own QDROs and related orders as part of the divorce case rather than sending them to outside non-lawyer services. Details such as survivor benefits, cost of living adjustments and early retirement subsidies are easy to miss, and even a small drafting mistake can have large financial consequences because the pension is often the biggest asset in the divorce.
Can I get a QDRO after my divorce is already final?
Yes. If a divorce was completed without the order needed to actually divide a pension, the order can still be prepared afterward. Willick Law Group prepares QDROs, COAPs, PERS orders and military retired pay division orders for individuals whose divorce is already final and for other law firms, through its QDRO Masters division, which drafts orders for attorneys throughout Nevada and across the country. Willick Law Group can review your situation in a consultation.