Retirement Benefits

What the hell is a QDRO?

Don't you feel like some people just use acronyms to make you feel stupid?

Now, I'm not saying that acronyms don't serve a purpose. I much prefer NASA to National Aeronautics and Space Administration. Ditto for CNN and ATM.

Other acronyms, though, have completely displaced the word. For example, I don't know what the letters RSVP mean. Same for AM/PM and IKEA. My hunch is that many of you didn't even know IKEA was an acronym.

The term QDRO is no better. And it's just one of the many acronyms that crowd out normal people from understanding family court.

It means Qualified Domestic Relations Order. Does that help? Didn't think so.

What we should call it is a DRO: Divide Retirement Order. That's clearer anyway.

A QDRO is a special order that a divorce court judge signs instructing a retirement plan on how to divide a person's retirement account or pension. It is separate from a divorce decree.

State law dictates the terms of your divorce. But federal law (which is supreme and controls if the two fight) dictates how a QDRO must be drafted. The result is a nightmare for many people.


Because the federal law does not paint with a broad brush. It is not warm and fuzzy, considering what people were trying to do or what's fair given the overall scope of a divorce.

Instead, it's like an anal retentive boss who stands over your shoulder, reading every line of your email looking for a missing comma. If he finds one, he makes you start typing again from scratch.

Last year, a Plan Administrator (the person who runs the retirement plan for your benefit) in one of my cases rejected a QDRO the other side had drafted. Care to guess how many times they rejected it? 4 times! And it wasn't nearly that bad.

Does every case need a QDRO?

No. It depends on whether a plan is subject to a federal law called ERISA. Ha! Yet another acronym!

The simple answer (if incomplete one) is that you need a QDRO for 401(k)'s and pensions, but not for IRA's. These can be divided by completing a simple form you get (for free) from the plan administrator.

Good luck and goodbye,