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Frequently Asked Questions
According to the Department of Labor, more than 48 million private wage and salary workers are currently covered by employer-sponsored pension plans in the United States. Whether and how to divide a participant’s interest in a pension plan are often important considerations in separation, divorce, and other domestic relations proceedings.
Even though the division of marital property is governed by state domestic relations law, any assignment of pension interests in a private plan are governed by federal law under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code of 1986 (“the Code”). Federal law requires that a pension plan pay benefits only to participants and their beneficiaries. Federal law prohibits a pension plan from assigning benefits to third parties except in circumstances specifically authorized by federal law. Federal law does allow payment of pension benefits to the former spouse, child or dependent of a participant in a pension plan if the court has entered a qualified domestic relations order (“QDRO”). The law states specific requirements which must be met before a pension plan can determine an order to be qualified.
What is a Qualified Domestic Relations Order?
How do you divide governmental pension plans?
Why should I retain an expert to prepare a QDRO?
Why not just use the model language often provided by a plan administrator?
Why should I get a QDRO now rather than wait until my former spouse retires or I need the money?
How long should the process take?
Who should draft QDRO's?
Is it better to divide pension assets or take another marital asset as a trade?
What are some examples of plans that need division orders?
Private Federal Qualified Plans Governed by ERISA:
- Defined Benefit Plans
- Retirement Plans – Defined Benefit
- Pension Benefit Plans – Defined Benefit
- Cash Balance Defined Benefit Plans
- Defined Contributions Plans
- Savings Plans
- Profit Sharing Plans
- Money Purchase Pension Plans
- Deferred Compensation Plans
- 457 Deferred Compensation Plan
- 403(b) Deferred Compensation Plan
- Employee Stock Ownership Plan
- 401(k)s and other cash deferred plans
Federal Employees Public Plans:
- Civil Service Retirement System (CSRS)
- Federal Employees Retirement System (FERS)
- Judicial Retirement System (JRS/JSAS)
- Foreign Service Pension System (FSPS)
- Military pensions (DFAS)
- Thrift Savings Plan (TSP)
Some California Public Plans:
- California Public Employees Retirement System (CALPERS)
- California State Teachers’ Retirement System (CALSTRS)
- Public Agency Retirement System (PARS)
- Los Angeles County Employees Retirement Association (LACERA)
- Los Angeles City Employees’ Retirement System (LACERS)
- City of Los Angeles Fire and Police Pension
- Ventura County Employees’ Retirement Association (VCERA)
- Santa Barbara County Employees Retirement System (SBCERS)
- Orange County Employees Retirement System (OCERS)
- Water and Power Employee’s Retirement Plan (DWP)
- Los Angeles County Metropolitan Transportation Authority (MTA)
- Other California City and County Plans
- City and State 457 Deferred Compensation Plans
- City and State 403(b) Deferred Compensation Plans
- City and State 401(a) Plans
- The Peace Officers & Firefighters (POFF) Supplemental Plan
- State of California Savings Plus Program (SPP)
- University of California Retirement System (UCRS)
Note that most midsize to large employers, public and private, offer at least two (2) retirement plans, a defined benefit plan and a defined contribution plan.