§35.03 Statutory Requirements for A Qdro

• Jurisdiction: Washington

§ 35.03 STATUTORY REQUIREMENTS FOR A QDRO

A QDRO means "a domestic relations order which creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a plan," I.R.C. § 414(p)(1)(A); 29 U.S.C. § 1056(d)(3)(B), and complies with the QDRO requirements described in this section and the QDRO prohibitions described in § 35.04, below. Finally, the plan administrator may need additional information depending on the type of plan, the distributions options available under the plan, and the structure of the order. See §§ 35.05, 35.06, 35.07, and 35.08, below.

[1] DRO Requirement

The state court order awarding a portion of the participant's plan benefits to the alternate payee must be a DRO.

[a] Character of Order

The order must create or recognize an alternate payee's right to receive all or a portion of a participant's benefits payable under the plan. I.R.C. § 414(p)(1)(A)(i); 29 U.S.C. § 1056(d)(3)(B)(i)(I).

[b] State Domestic Relations Order (DRO)

The order (1) must be a

judgment, decree, or order (including approval of a property settlement agreement) which—
(I) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and
(II) is made pursuant to a State domestic relations law (including a community property law).

I.R.C. § 414(p)(1)(B); 29 U.S.C. § 1056(d)(3)((B)(ii).

In the following, judgments, decrees, or orders were found not to have been made pursuant to a state domestic relations law that related to the dissolution of a marriage or recognition of support obligations:

(1) The U.S. Supreme Court held that ERISA preempted Louisiana community property law and succession law to the extent that it allowed a deceased spouse to bequeath her community property interest in her former husband's undistributed plan benefits. Boggs v. Boggs, 520 U.S. 833, 117 S. Ct. 1754, 138 L. Ed. 2d 45 (1997). The Court classified the survivor annuity received by the surviving spouse, the cash withdrawn by the participant and rolled to an IRA, and the AT&T stock distributed to the participant as undistributed plan benefits, apparently because they were undistributed at the time of the attempted testamentary transfer.
(2) The estate of the predeceased nonparticipant spouse argued that under California community property law, the spouse can dispose of an interest in the participant's plan benefits by will and that the probate order constituted a QDRO. The court held that (a) ERISA preempts community property law, and (b) the order by the probate court did not meet the requirements of a QDRO. Ablamis v. Roper, 937 F.2d 1450 (9th Cir. 1991); DOL Advisory Op. 90-46A (Dec. 4, 1990).
(3) A writ of garnishment was held not to be a QDRO. Ariz. Laborers, Teamsters, and Cement Masons Pension Tr. Fund v. Nevarez, 661 F. Supp. 365 (D. Ariz. 1987).
(4) A postnuptial agreement dividing a participant's interest in a pension plan between subaccounts creates an impermissible alienation or assignment of benefits rather than a QDRO. Merchant v. Kelly, 874 F. Supp. 300 (D. Colo. 1995).
(5) The general partition of accrued benefits in a community property state is an impermissible alienation of benefits under I.R.C. § 401(a)(13) unless done

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