Section 16.27 Timing of Distributions

• Library: Family Law Deskbook and 2014 Supp

d. (§16.27) Timing of Distributions

In the case of stream of payment QDROs, the time in which to commence distribution is one in which the alternate payee has some discretion. If the alternate payee elects to receive benefits under the “earliest retirement age” rule, discussed in §16.24 above, consideration should be given to the amount of the benefit reduction by reason of the commencement of “early retirement benefits” as well as whether the amount of the benefit is subject to later modification.

With respect to a separate interest QDRO, a qualified plan may make distribution to an alternate payee even before the “earliest retirement age” as long as the plan document expressly permits immediate distributions in a domestic relations setting. More and more large employer defined contribution plans are providing for early distribution of amounts awarded under separate interest QDROs, primarily to avoid administration of nonemployee participant accounts. If the alternate payee is in need of...