Chapter 9: Qualified Domestic Relations Orders (QDROs)

A QDRO must apply to only a single retirement plan.

False. A QDRO may apply to more than one plan if each plan and provisions to each plan are clearly identified.

A QDRO must be a stand-alone document separate from the divorce decree and the property settlement.

False. Even though it is often a stand-alone document, a QDRO may be incorporated in a divorce decree or property settlement.

The plan administrator should review each QDRO to be certain that both the participant and the alternate payee are being treated fairly as to the level of benefits provided.

False. It is not the responsibility of the plan administer to determine fairness in the assignment of benefits.

Shared payment assignments provide much greater flexibility for the alternate payee regarding the commencement of benefits than do separate interest assignments.

False. Separate interest assignments allow the alternate payee to choose a commencement date.

All of the following items must be included in a QDRO, EXCEPT: A. The name and address of each alternate payee B. A requirement that a lump-sum option be available to an alternate payee, whether or not such option is available to the participant C. The name of each plan to which the order applies D. The time period to which the order applies E. The dollar amount or percentage of benefit (or method to calculate an amount or percentage) to which the order applies

The correct answer is B. Only benefit options available to the participant are available to the alternate payee, except for the QJSA.

All of the following statements regarding advantages of the separate interest approach to the alternate payee are TRUE, EXCEPT: A. The alternate payee can generally make an election for benefits to commence before the participant commences payments. B. The alternate payee can generally choose any form of benefit available to the participant, except for the QJSA. C. The alternate payee can commence payment at the earliest early retirement date available to the participant and receive the subsidized early retirement benefit (regardless of whether the participant has elected to begin receiving benefits). D. Payments can continue for the alternate payee's lifetime. E. Payment can continue beyond the lifetime of the participant.

The correct answer is C. Statement C is false. With a separate interest assignment, the alternate payee cannot receive the subsidy if the alternate payee's benefit begins before the participant begins receiving benefits.

Which of the following statements regarding a shared payment form of assignment is/are TRUE? I. An alternate payee is assigned a portion of each benefit payment amount. II. The alternate payee can chose any form of benefit available under the plan. III. Generally, the form of payment is not determined by the QDRO. A. I only B. III only C. I and III only D. II and III only E. I, II and III

The correct answer is C. Statement II is incorrect, as the alternate payee cannot choose the QJSA.

A QDRO cannot require a plan to provide benefits greater than the actuarial equivalent of the benefit that would have been provided to the participant.

True

A QDRO may provide for payment to the guardian of an alternate payee.

True

A QDRO may specify that the former spouse is considered the participant's spouse for purposes of QPSA and QJSA benefits.

True

If the assignment is a percentage of the accrued benefit, the QDRO should explicitly outline such details as to the date the benefit is to be determined and how future changes in the benefit due to plan amendments or increases in final average compensation affect the alternate payee's benefit.

True

The plan administrator should accept any proposed QDRO which can be administered and meets all legal requirements.

True