A Qualified Domestic Relations Order (QDRO) is a legal document that recognizes the right of an alternate payee, such as a spouse or former spouse, to receive a portion of the benefits of a participant's retirement or pension plan in the event of divorce or legal separation. It contains specific instructions, including the division of the participant's benefits, ensuring the order complies with the plan's requirements and federal laws. The document outlines various methods for assigning benefits and provides model language to help draft an order that will be approved by the court. If you need to secure your rights to a retirement plan after a divorce, filling out a QDRO form carefully is crucial. Click the button below to begin the process.
In the realm of retirement and investment planning, a Qualified Domestic Relations Order (QDRO) emerges as a critical legal tool, particularly during divorce proceedings. The Floria Retirement System Investment Plan QDRO encompasses a definitive guide and model language intended to facilitate the equitable division of a participant's defined contribution plan. This detailed document, spanning from pages 1 through 8, lays out a comprehensive framework, starting with general instructions and evolving into meticulous model language. It addresses every essential aspect—ranging from the plan under which the member's benefits are being assigned, identification details of the member and the alternate payee, to the specifics of benefit distribution methods and the form of payment. With options for straight percentage, dollar amount, or marital fraction methods available, it emphasizes the importance of selecting a singular approach for benefit division. Moreover, it outlines the procedural dimensions if the member or alternate payee passes away, establishes taxation implications, and underscores the necessity of court certification to qualify the domestic relations order. By meticulously filling in requested information and adhering to provided instructions, individuals can ensure their domestic relations orders meet all requisite qualifications for approval, thereby navigating the complexities of retirement benefit distribution with greater accuracy and legal compliance.
The FRS Investment Plan
Qualified
Domestic Relations
Order
Defined Contribution
Plan Instructions and
Model Language
Instructions for Using the Model Language Provided
General Information
This document contains model language for a defined contribution plan Qualified Domestic Relations Order (QDRO). Pages 1 through 3 contain explanations and instructions that apply to the model QDRO language on pages 4 through 8. The explanations contain answers to most questions you may have about the model language. If you follow the instructions carefully, your domestic relations order should meet all qualifications for approval. Be sure to fill in every line wherever information is requested.
If you would like more information on the qualification process, see the Procedures document.
Since there are a number of different ways to design a QDRO and provide for division of benefits, the Plan makes no representation as to which method is best for the parties involved.
Note: Only court-certified orders can be qualified.
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Instructions
1. Plan
In this section, you are asked to specify the defined contribution plan under which the member’s benefits are being assigned. The plan name is Florida Retirement System Investment Plan (or FRS Investment Plan).
2. Member
In this section, you are asked to identify the member whose benefits are being assigned. Fill in the following information about the member:
•Complete name
•Current mailing address (including ZIP Code)
•Social Security number
•Date of birth
3. Alternate Payee
In this section, you are asked to identify the alternate payee to whom the benefits are being assigned. Please fill in the following information about the alternate payee:
•Complete Name
•Current Mailing Address (including ZIP Code)
•Social Security Number
•Date of Birth
•Relationship to member
Note: It is acceptable to provide the addresses, Social Security numbers, and/or dates of birth on an attached document which is cross-referenced in the domestic relations order.
4. Marital History
In this section, you are asked for the dates when the participant and the alternate payee were married and divorced. Fill in the dates of marriage and divorce. If you are assigning a marital fraction, these dates will be used to determine the marital fraction
5. Definitions
The model language includes some defined terms with which you may not be familiar. These terms will be used throughout the order.
6. Benefit Payable to the Alternate Payee
In this section, you are asked to choose one of two options for specifying the dollar amount or percentage of the vested account balance to be paid, when it will be calculated, and whether any outstanding member loans and earnings/losses are to be included in the alternate payee’s benefit. Each option uses a different method: Option A uses a straight percentage method, Option B uses a dollar amount method, and Option C uses a marital fraction.
Your order cannot use a combination of these methods. Select one method only.
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Option A. Straight Percentage
Please provide the following information:
•The percentage of the member’s Vested Account Balance that is to be assigned to the alternate payee
•The date the Vested Account Balance is to be calculated (known as the valuation date)
•Whether the alternate payee’s benefit will (or will not) be adjusted for earnings or losses during the period between the valuation date and the liquidation date
Option B. Dollar Amount
Please provide the dollar amount of the member’s Vested Account Balance that is to be assigned to the alternate payee.
Option C. Marital Interest
(This option can be used only if the member has previously transferred a benefit in the FRS Pension Plan (Defined Benefit Plan) to the FRS Investment Plan.
Please provide the percentage of the marital interest in the member’s vested accrued benefit that is to be assigned to the alternate payee. The member’s benefit in the Investment Plan will be valued as the date of the benefit transferred into the Investment Plan.
Note: The marital property fraction will be based on the dates provided in Section 5 of this order and on the participant’s employment history.
7. Form of Payment
This section describes the intended form of payment to the alternate payee. Plan benefits are usually paid immediately in a lump-sum cash distribution. This amount reflects any earnings and losses from the liquidation date to the date of distribution to the alternate payee.
8. Commencement
This section states when payment of benefits to the alternate payee will begin. Typically, the Plan permits payment to begin as soon as administratively possible following the determination that the order has been qualified.
9. Death Procedures
This section specifies procedures for payments of benefits under the QDRO in the event of death of either the member or the alternate payee.
10. Retention of Jurisdiction
This section outlines what is required of both parties if the Plan Administrator initially determines that the order is not qualified. It also states that the court (named earlier) expressly reserves jurisdiction over the dissolution proceeding involving the member, the alternate payee, and the member’s interest in the Plan.
11. Limitations
This section provides specific legal limits on the order.
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12. Taxation
This section explains that any payments made to the alternate payee, who is a spouse or former spouse, will be subject to the appropriate federal, state, and local taxes.
13. Constructive Receipt
This section outlines what the member and the alternate payee are required to do if either receives benefits from the Plan that should have been paid to the other party.
14. Certification of Necessary Information
This section explains that the court may require the member and the alternate payee to certify in writing that the information on which this order is based is accurate.
Note: Only original court-certified orders can be qualified.
END INSTRUCTIONS—MODEL LANGUAGE FOLLOWS
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STATE OF _________________ CASE # ___________________
COUNTY OF _______________
IN THE ____________________ COURT OF ________________
IN RE TO THE MARRIAGE OF:
__________________________________________
Petitioner and
Respondent
Qualified Domestic Relations Order (Defined Contribution Plan)
This order creates and recognizes the existence of an alternate payee’s right to receive a portion of the member’s benefits payable under the FRS Investment Plan, which is qualified under Section 401 of the Internal Revenue Code (the “Code”). This order is intended to be a qualified domestic relations order (“QDRO”), as that term is defined in section 206(d) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and section 414(p) of the Internal Revenue Code of 1986, as amended (“Code”). This order is entered pursuant to the authority granted under the applicable domestic relations laws of the State of _________________________________.
This order applies to the FRS Investment Plan (the “Plan”)
Any successor to this plan shall also be subject to the terms of the order.
The name, address, Social Security number, and date of birth of the member are as follows:
Name:
Address:
Social Security Number:
Date of Birth:
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The person named as alternate payee meets the requirements of the definition of alternate payee as set forth in Section 4 of this order. The alternate payee’s name, address, Social Security number, date of birth, and relationship to the member are as follows:
Relationship to Member:
The alternate payee shall be responsible for notifying the Plan Administrator in writing of any changes in his or her mailing address subsequent to the submission of this order.
Date of Marriage:
Date of Divorce:
Alternate Payee—The alternate payee is any spouse, former spouse, child, or other dependent of a member who is recognized by a domestic relations order as having a right to receive all or a portion of the benefits payable under the Plan with respect to the member.
Liquidation Date—The liquidation date is the date the amount assigned to the alternate payee is transferred from the member’s Vested Account Balance to a separate account established for the alternate payee in accordance with the terms of the QDRO. An assignment as of the liquidation date assigns a portion of the member’s current Vested Account Balance.
Marital Interest—The marital interest is the member’s account balance benefit as of the Transfer Date multiplied by the following fraction:
Number of Marital Years (from the Date of Marriage to the Date of Divorce) while accruing benefits under the Plan
Years of Service during which the
member has accrued a benefit under the Plan up to the Transfer Date (the date the member’s benefit transferred into the Investment Plan)
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Plan Administrator—The Florida State Board of Administration (“SBA”) is the Plan Sponsor. SBA has contracted with Hewitt Associates LLC to process domestic relations orders in accordance with the FRS Investment Plan’s QDRO requirements. Hewitt’s Qualified Order Team will conduct the qualification process.
Transfer Date— The Transfer Date is the date the member transferred a benefit from the FRS Pension Plan (Defined Benefit Plan) into the FRS Investment Plan via an accumulated benefit obligation.
Valuation Date—The Valuation Date is the date on which the member’s Vested Account Balance will be valued in order to determine the alternate payee’s designated portion in accordance with the terms of this order. Accounts are valued on a daily basis.
Vested Account Balance—The member’s Vested Account Balance is the dollar amount the member has a nonforfeitable right to receive from the Plan.
(Choose Option A, Option B, or Option C. You may not choose more than one option)
Option A. Straight Percentage
The order assigns to the alternate payee an amount equal to _______ % of the member’s Vested
Account Balance under the Plan (identified in Section 1) as of ____________________ (insert
applicable Valuation Date).
From the Valuation Date to the liquidation date, the amount assigned to the alternate payee (select one):
Will be adjusted for investment earnings (gains and losses) from the Valuation Date to the date as of which the account is established for the Alternate Payee.
Will not be adjusted for investment earnings (gains and losses) from the Valuation Date to the date as of which the account is established for the Alternate Payee.
Option B. Dollar Amount
This order assigns to the alternate payee an amount equal to $_______ of the member’s Vested
Account Balance under the Plan (identified in Section 1) as of the liquidation date.
Option C. Marital Fraction
This order assigns to the alternate payee an amount equal to _______ % of the “marital interest” (as
defined in Section 4 and 5 above) in the participant’s account balance under the Plan (identified in Section 1) as of the Transfer Date.
The alternate payee is eligible for any available form of payment under the provisions of the FRS Investment Plan.
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The alternate payee shall be eligible to receive payment as soon as administratively reasonable following the determination that this order is a Qualified Domestic Relations Order. In no event can the alternate payee begin his or her benefit later than April 1 following the year in which the member attains age 70-1⁄2.
If the member predeceases the alternate payee prior to payment of the alternate payee’s assigned benefits under the QDRO, the alternate payee’s benefits will not be affected. In the event of the member’s death, the account balance, which remains the property of the member, will be payable to the member’s designated beneficiary or in accordance with Plan provisions. This order does not require the member to name the alternate payee as the beneficiary for the benefits not assigned to the alternate payee.
In case of the death of the alternate payee prior to distribution of the alternate payee’s benefits under the QDRO, the assigned benefits will be paid to the alternate payee’s designated beneficiary or, if none, in accordance with Florida law (Section 121.4501(20).
This matter arises from an action for divorce or legal separation in this court under the case number set forth at the beginning of this order. Accordingly, this court has jurisdiction to issue this order.
In the event the Plan Administrator determines that this order is not a Qualified Domestic Relations Order, both parties shall cooperate with the Plan Administrator in making any changes needed for it to become qualified. This includes signing all necessary documents. For this purpose, this court expressly reserves jurisdiction over the dissolution proceeding involving the member, the alternate payee, and the member’s interest in the Plan. This Order hereby vacates any previously issued QDRO in this case.
Pursuant to Section 414(p)(3) of the Code and except as provided by Section 414(p)(4), this order:
(i)Does not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan;
(ii)Does not require the Plan to provide increased benefits; and
(iii)Does not require the payment of benefits to an alternate payee that is required to be paid to another alternate payee under another order previously determined to be a Qualified Domestic Relations Order.
12.Taxation
For purposes of Sections 402 and 72 of the Code, any alternate payee who is the spouse or former spouse of the member shall be treated as the distributee of any distributions or payments made to the alternate payee under the terms of the order and, as such, will be required to pay the appropriate federal, state, and local income taxes on such distributions.
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If the Plan inadvertently pays to the member any benefit that is assigned to the alternate payee pursuant to the terms of this order, the member will immediately reimburse the Plan to the extent the member has received such benefit payments and shall forthwith pay such amounts so received to the Plan within ten (10) days of receipt.
If the Plan inadvertently pays to the alternate payee any benefit that is actually payable to the member, the alternate payee must make immediate reimbursement. The alternate payee must reimburse the Plan to the extent he or she has received such benefit payments and shall forthwith pay such amount so received to the Plan within ten (10) days of receipt.
14. Effect of Plan Termination
If the Plan is terminated, the alternate payee shall be entitled to receive his or her portion of the member’s benefits as stipulated herein in accordance with the Plan’s termination provisions for members and beneficiaries.
15. Certification of Necessary Information
All payments made pursuant to this order shall be conditioned on the certification by the alternate payee and the member to the Plan Administrator of such information as the Plan Administrator may reasonably require from such parties to make the necessary calculation of the benefit amounts contained herein.
Dated this _________ day of ____________________, ______
By the court:
__________________________________________________
Judge’s Signature
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Filling out a Qualified Domestic Relations Order (QDRO) can seem daunting at first, but understanding the process step by step can make it more manageable. A QDRO is an essential document for assigning a portion of retirement benefits from one party to another, typically due to divorce or legal separation. It requires precise information about the plan, the member, and the alternate payee to ensure that the order meets all qualifications for approval. By carefully following the steps below, filling out the form can be a straightforward process, ensuring that the domestic relations order is accurately prepared.
Once all steps are carefully completed, the QDRO form should be reviewed for accuracy and completeness. Ensuring that every section is correctly filled out is vital for the smooth processing and qualification of the order. If there is any uncertainty, seeking clarification or legal guidance can prevent potential issues. After submission, the process of qualifying the order begins, underscoring the importance of precision and attention to detail in completing the form.
What is a Qualified Domestic Relations Order (QDRO)?
A Qualified Domestic Relations Order (QDRO) is a legal document that specifies how retirement plan assets will be divided between the plan member and an alternate payee, usually a spouse or former spouse, in the event of divorce or legal separation. It must be approved by the court and the plan administrator to take effect.
How does one fill out the QDRO form for the FRS Investment Plan?
To fill out the QDRO form for the Florida Retirement System (FRS) Investment Plan, you must provide detailed information about both the plan member and the alternate payee, including full names, addresses, Social Security numbers, and dates of birth. The form also requires details of the marriage and divorce, including dates, and specifies how the member’s vested account balance will be divided. Every line requesting information must be completed, and in some cases, additional documents might be attached for reference.
What options are available for distributing the vested account balance?
There are three methods for specifying the distribution of the vested account balance to the alternate payee: a straight percentage of the account balance, a specific dollar amount, or a marital fraction based on the marriage period and employment history. It is crucial to select only one method and provide the necessary details as outlined in the document.
When will payments to the alternate payee commence?
Payments to the alternate payee typically begin as soon as administratively possible after the order has been determined to be qualified. This timing allows for the efficient distribution of assets according to the stipulations of the QDRO.
What happens in the event of the death of the member or the alternate payee?
The QDRO document outlines specific procedures for the distribution of benefits if either the plan member or the alternate payee passes away. These procedures ensure that the assets are distributed in accordance with the original terms of the order, taking into consideration the unfortunate event.
Are there any limitations to what a QDRO can do?
Yes, there are specific legal limitations outlined in the QDRO document. These limitations are designed to ensure that the division of retirement assets complies with both the plan's guidelines and legal standards. Understanding these limits is crucial for both parties involved to have realistic expectations regarding the outcome of the division of assets.
Filling out a Qualified Domestic Relations Order (QDRO) requires attention to detail to ensure that the document is correctly completed and legally binding. Common mistakes can lead to delays or the rejection of the QDRO, affecting the division of retirement benefits. Below are eight common errors people make when completing the QDRO form.
One widespread mistake is not providing complete and accurate information for both the plan member and alternate payee. The form requires detailed information, including full names, current mailing addresses, Social Security numbers, and dates of birth. Failing to fill in every line with the correct information can result in processing delays or outright disqualification.
Another common error is improperly identifying the retirement plan. The model language specifies the plan as the Florida Retirement System Investment Plan, but if any other plan is involved, it must be accurately named. Incorrectly identifying the plan might lead to confusion and potentially the wrong plan being accessed for the division of assets.
Individuals often struggle with selecting the appropriate method for dividing the plan's benefits—identified as Options A, B, and C in the document. Each option outlines a different method for allocation, including straight percentage, dollar amount, and marital fraction. Choosing more than one method or failing to specify one clearly can invalidate the order.
An omission that can notably impact the execution of the QDRO is neglecting to describe the form of payment to the alternate payee. The standard procedure involves immediate payment in a lump-sum cash distribution, reflecting any earnings and losses. Not specifying or understanding the form of payment can lead to incorrect expectations and financial planning.
Clarifying the commencement of payments is crucial, yet often overlooked. The document typically allows for payments to begin as soon as administratively possible after the order is deemed qualified. Misunderstanding this timeline can lead to unnecessary inquiries and frustration regarding the disbursement of benefits.
Understanding and correctly implementing the limitations and taxation sections of the QDRO form is paramount. Failure to acknowledge legal limits or the tax implications for the alternate payee can lead to legal and financial consequences post-distribution.
One significant error is not adhering to the instruction that only original, court-certified orders can be qualified. Attempts to submit copies or non-certified documents can nullify the entire process, necessitating the submission of a correctly certified order.
Finally, a mistake often made but easily avoided is not reviewing the document for completeness and accuracy before submission. The model language provided includes instructions and definitions meant to clarify the process. Skipping this crucial step of review can lead to the submission of an incomplete or incorrect QDRO, ultimately delaying the division of assets.
When navigating the complexities of distributing defined contribution plan benefits in the context of a divorce or legal separation, a Qualified Domestic Relations Order (QDRO) is a critical document. However, it rarely stands alone in the process. Many other forms and documents are often used alongside a QDRO to ensure a comprehensive and legally compliant division of assets. Understanding these additional documents can provide a clearer path through the legal process.
In the landscape of legal and financial planning surrounding divorce, documents such as the QDRO play a pivotal role. Yet, they are part of a broader framework of legal documents that, collectively, ensure the equitable and lawful division of assets. Each document serves its unique function while contributing to the overarching goal of addressing all financial ramifications of the divorce. For practitioners and parties alike, recognizing and understanding the role of these additional documents is essential to navigating the divorce process successfully and securing a stable financial future.
The Qualified Domestic Relations Order (QDRO) shares similarities with a will, particularly in how it designates the distribution of an individual's assets. A will, like a QDRO, provides detailed instructions on how the assets of the deceased should be allocated among beneficiaries. While a QDRO specifically deals with the allocation of retirement plan benefits in the event of a divorce, separation, or child support, both documents serve to legally enforce the distribution of assets according to the wishes of the person who owns them.
Trust documents are another category that resonates with the essence of a QDRO. Trusts are established to manage assets on behalf of beneficiaries, often with specific instructions and conditions similar to those found in QDROs. The main difference lies in the fact that trusts can cover a wider range of assets and situations, while QDROs are specifically focused on retirement benefits. Nonetheless, both are intended to ensure that assets are distributed according to predefined criteria.
Divorce decrees, which finalize the dissolution of a marriage and outline the distribution of assets, child custody, and support arrangements, closely resemble the function of a QDRO. Although a divorce decree can encompass a broader range of decisions, a QDRO is a specialized order that specifically deals with the division of retirement benefits. Both documents are products of court proceedings and are legally binding, highlighting their significant role in clearly defining post-divorce responsibilities and entitlements.
Child support orders also share similarities with QDROs. These legal documents determine the financial support owed by one parent to the custodial parent for the care of their children. Like a QDRO, which may also include provisions for child support from retirement benefits, child support orders are legally enforceable and aim to ensure that adequate financial provisions are made for dependents.
Alimony agreements, which involve payments made from one spouse to another post-divorce, are similar to QDROs in that they both relate to financial support obligations arising from the dissolution of a marriage. While alimony covers a broader spectrum of financial support, a QDRO specifically addresses the division of retirement plan benefits. Both documents are instrumental in safeguarding the financial interests of former spouses.
Beneficiary designations on life insurance policies and retirement accounts also bear a resemblance to QDROs. These designations specify who will receive the assets of a policy or account upon the death of the owner. Although QDROs are more complex and specifically related to the division of assets due to divorce or legal separation, both types of designations are crucial for the intended distribution of an individual’s assets.
Finally, prenuptial agreements, which are contracts entered into before marriage that outline the division of assets and financial responsibilities in the event of a divorce, share aspects with QDROs. While prenuptial agreements can address a broad array of financial arrangements, QDROs come into play after marital dissolution, specifically concerning retirement benefits. Both serve to clarify and enforce financial agreements and obligations between parties in the context of marriage and divorce.
Filling out the Qualified Domestic Relations Order (QDRO) form can seem daunting. However, paying close attention to the details and avoiding common pitfalls can help ensure the process goes smoothly. Here are essential do's and don'ts to guide you through filling out a QDRO form effectively.
Remember, only court-certified orders can be qualified. Following these guidelines closely will help ensure that your QDRO form is filled out accurately and efficiently, facilitating a smoother qualification process.
There are several misconceptions about the Qualified Domestic Relations Order (QDRO) form that can lead to confusion. Unraveling these misunderstandings can help individuals navigate the complexities of dividing retirement benefits during divorce proceedings more effectively.
Clarifying these misconceptions about QDROs can lead to a smoother process for all parties involved in the division of retirement assets during a divorce. It's important for individuals to consult with professionals who are well-versed in family law and retirement plans to ensure that the division is handled correctly and efficiently.
Qualified Domestic Relations Orders (QDROs) are crucial documents used to assign benefits from a defined contribution plan, such as the Florida Retirement System Investment Plan, to an alternate payee typically in the event of a divorce. Understanding the key components of filling out and using a QDRO is essential for ensuring the process is carried out correctly.
By honoring these guiding principles, involved parties can navigate the complexities of assigning benefits through a QDRO with greater ease and legal fidelity. This ensures both compliance with legal standards and respect for the equitable distribution of assets.
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