|
QDRO to Collect Past Due Child Support
Overview of a California QDRO and Dividing California Retirement Accounts
When a married person accumulates an interest in a pension, retirement, profit sharing, or other employee benefit plan during the marriage, the part that was accumulated during the marriage is community property.
Retirement benefits vary greatly but can generally be divided into two groups:
- Defined Contribution Plans: A defined amount of money belonging to the employee. The employee and/or the employer make defined contributions. The balance of the plan is constantly changing, but its value is definable at any given point. 401(k)’s, 403(b)’s and profit sharing plans fall into this category.
- Defined Benefit Plans: A retirement benefit where an employer promises to pay a benefit to an employee sometime in the future, based upon some type of formula. Normally, this formula is based on the employee’s salary near the end of his or her career and the number of years he or she worked for the employer before retirement. Defined benefit plans are much more complicated to value and often require the professional evaluation of an actuary to determine exact values.
Pension Plans are divided in one of two ways: 1) a reservation of jurisdiction or 2) a cash-out. The spouse who owns the retirement plan can pay the other spouse for the non-owner spouse’s share of the community interest, or the court can reserve jurisdiction to have each spouse receive a proportionate share of the benefits when they are paid.
In California and other jurisdictions, if spouses share in each other’s retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, and how such benefits should be paid.
The other method of dealing with a pension involves obtaining "actuarial evaluation." An actuary is an expert who deals with statistical and financial evaluations of insurance policies, annuities, and pensions. By reviewing the plan description as well as the accumulations on the account of the employed spouse, the actuary can determine the "present value" of the community share of the pension plan. With a cash-out, the employed spouse receives the pension plan in its entirety, and the other spouse receives other community property assets of equivalent value.
|
….. Start Now 
|
