Section 16.17 Statutory Overview

• Library: Family Law Deskbook and 2014 Supp

1. (§16.17) Statutory Overview

The REA (Retirement Equity Act of 1984), Pub. L. No. 98-397, 98 Stat. 1426, was a landmark in the area
of equitable distribution in divorce cases. The major thrust of the REA was the promulgation of new I.R.C. § 414(p) (ERISA § 206(d)(3), 29 U.S.C. § 1056(d)(3)), which establishes a somewhat uniform national procedure for the implementation of state court orders relating to the division and distribution of qualified retirement plan interests in connection with divorce or separation, known as QDROs. Before the enactment of I.R.C. § 414(p), a qualified plan was prohibited from permitting assignment or alienation of a participant’s benefits or interest in
the plan. I.R.C. § 401(a)(13) (ERISA § 206(d), 29 U.S.C. § 1056(d)). In fact, for a trust forming part of a qualified plan, for the trust to qualify for tax-free treatment,
the plan must preclude the situation in which any part
of the principal or income of the trust to be used for
or diverted for any purposes other than the exclusive benefit of the employee/participants or their beneficiaries, except in the limited case of QDROs. I.R.C. § 401(a)(2), Treas. Reg. § 1.401-2(a)(2) (ERISA § 403(c)(1), 29 U.S.C. §...