GAO Publishes Qualified Domestic Relations Orders Report

Thursday, November 12, 2020

In July 2020, the Authorities Accountability Workplace (GAO) ready a report for the Rating Member of the Senate Committee on Well being, Schooling, Labor and Pensions about Certified Home Relations Orders (QDROs). QDROs are court-issued orders that enable a divorced partner (or in uncommon circumstances a baby) to obtain a portion of a participant’s certified retirement plan profit. A QDRO is without doubt one of the few methods by which a participant’s certified retirement profit might be assigned or alienated.

The report’s two key findings have been to encourage the Division of Labor (DOL) to:

Discover methods to gather information on the charges that outlined contribution plans cost to members or alternate payees for reviewing QDROs

Enhance divorcing events’ entry to details about the QDRO course of.

If you’re an outlined contribution plan sponsor, in mild of the GAO’s report and suggestions it could be an excellent time to evaluate the charge your plan fees for the evaluate and processing of a QDRO (if any) to guage whether or not the charge is cheap for the prices related to the QDRO-qualification evaluate. The GAO stories that typical charges for a QDRO evaluate are between $300 and $600. Of the seven private large-plan sponsors that accomplished the GAO survey, 5 didn’t cost something for a QDRO-qualification evaluate and the opposite two charged $300 and $350, respectively. Remember additionally that QDRO-related charges needs to be disclosed within the abstract plan description for the plan, in addition to in a plan’s participant charge disclosures.

Moreover, in case your plan doesn’t have a mannequin QDRO doc that may be supplied to members or potential alternate payees, you must work along with your recordkeeper or authorized counsel to organize a mannequin QDRO draft to your plan.