A QDRO, or Qualified Domestic Relations Order, is the court order that tells a retirement plan how to divide benefits between divorcing spouses. In California, the community portion of a 401(k) or pension earned during the marriage is generally divided equally, but the plan won’t pay the non-employee spouse anything until it receives a valid QDRO.
The process starts with the divorce judgment, which states how the account will be divided. A separate QDRO is then drafted to meet both California law and the plan’s own rules. It goes to the plan administrator for preapproval, is signed by the judge, and is sent back to the plan for final acceptance.
Defined contribution plans, such as 401(k)s, are usually divided by a percentage or a set share as of a valuation date. Pensions are more complex. The community share is often calculated with the time rule, which compares the years of service during the marriage with total years of service. Survivor benefits, early retirement subsidies and cost-of-living adjustments should all be addressed.
Government plans, including CalPERS, CalSTRS and military retirement, have their own rules and forms. IRAs don’t need a QDRO; they’re divided by a transfer incident to divorce.
The most common mistake is waiting. If a QDRO isn’t completed, the employee spouse may retire, take a lump sum or die before the order is in place.
Law & Mediation Offices of Dan DeSario & Associates, a Beverly Hills family law and mediation practice, recommends preparing the QDRO alongside the judgment so retirement assets aren’t left undivided.
*Attorney advertising. This article is general information about California family law and is not legal advice. Every case is different.*