Content Overview
The Qualified Domestic Relations Order (QDRO) form is an essential tool for individuals navigating the division of retirement benefits during a divorce or separation. This form specifically pertains to defined contribution plans, such as the Florida Retirement System Investment Plan. It provides a structured way to assign benefits from one spouse to another, ensuring that both parties receive their fair share of the retirement assets accrued during the marriage. The QDRO form contains detailed instructions and model language to guide users through the process, covering critical aspects such as identifying the member and alternate payee, specifying marital history, and determining the benefit payable. Additionally, it outlines various options for calculating the benefits, whether through a percentage of the vested account balance or a fixed dollar amount. Important sections address the timing of payments, procedures in the event of death, and tax implications, all of which are crucial for ensuring compliance with legal requirements. By following the provided instructions carefully, individuals can create a court-certified order that meets the necessary qualifications for approval, paving the way for a smoother transition during what can often be a challenging time.
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The FRS Investment Plan
Qualified
Domestic Relations
Order
Defined Contribution
Plan Instructions and
Model Language
Instructions for Using the Model Language Provided
General Information
This document contains model language for a defined contribution plan Qualified Domestic Relations Order (QDRO). Pages 1 through 3 contain explanations and instructions that apply to the model QDRO language on pages 4 through 8. The explanations contain answers to most questions you may have about the model language. If you follow the instructions carefully, your domestic relations order should meet all qualifications for approval. Be sure to fill in every line wherever information is requested.
If you would like more information on the qualification process, see the Procedures document.
Since there are a number of different ways to design a QDRO and provide for division of benefits, the Plan makes no representation as to which method is best for the parties involved.
Note: Only
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Instructions
1. Plan
In this section, you are asked to specify the defined contribution plan under which the member’s benefits are being assigned. The plan name is Florida Retirement System Investment Plan (or FRS Investment Plan).
2. Member
In this section, you are asked to identify the member whose benefits are being assigned. Fill in the following information about the member:
•Complete name
•Current mailing address (including ZIP Code)
•Social Security number
•Date of birth
3. Alternate Payee
In this section, you are asked to identify the alternate payee to whom the benefits are being assigned. Please fill in the following information about the alternate payee:
•Complete Name
•Current Mailing Address (including ZIP Code)
•Social Security Number
•Date of Birth
•Relationship to member
Note: It is acceptable to provide the addresses, Social Security numbers, and/or dates of birth on an attached document which is
4. Marital History
In this section, you are asked for the dates when the participant and the alternate payee were married and divorced. Fill in the dates of marriage and divorce. If you are assigning a marital fraction, these dates will be used to determine the marital fraction
5. Definitions
The model language includes some defined terms with which you may not be familiar. These terms will be used throughout the order.
6. Benefit Payable to the Alternate Payee
In this section, you are asked to choose one of two options for specifying the dollar amount or percentage of the vested account balance to be paid, when it will be calculated, and whether any outstanding member loans and earnings/losses are to be included in the alternate payee’s benefit. Each option uses a different method: Option A uses a straight percentage method, Option B uses a dollar amount method, and Option C uses a marital fraction.
Your order cannot use a combination of these methods. Select one method only.
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Option A. Straight Percentage
Please provide the following information:
•The percentage of the member’s Vested Account Balance that is to be assigned to the alternate payee
•The date the Vested Account Balance is to be calculated (known as the valuation date)
•Whether the alternate payee’s benefit will (or will not) be adjusted for earnings or losses during the period between the valuation date and the liquidation date
Option B. Dollar Amount
Please provide the dollar amount of the member’s Vested Account Balance that is to be assigned to the alternate payee.
Option C. Marital Interest
(This option can be used only if the member has previously transferred a benefit in the FRS Pension Plan (Defined Benefit Plan) to the FRS Investment Plan.
Please provide the percentage of the marital interest in the member’s vested accrued benefit that is to be assigned to the alternate payee. The member’s benefit in the Investment Plan will be valued as the date of the benefit transferred into the Investment Plan.
Note: The marital property fraction will be based on the dates provided in Section 5 of this order and on the participant’s employment history.
7. Form of Payment
This section describes the intended form of payment to the alternate payee. Plan benefits are usually paid immediately in a
8. Commencement
This section states when payment of benefits to the alternate payee will begin. Typically, the Plan permits payment to begin as soon as administratively possible following the determination that the order has been qualified.
9. Death Procedures
This section specifies procedures for payments of benefits under the QDRO in the event of death of either the member or the alternate payee.
10. Retention of Jurisdiction
This section outlines what is required of both parties if the Plan Administrator initially determines that the order is not qualified. It also states that the court (named earlier) expressly reserves jurisdiction over the dissolution proceeding involving the member, the alternate payee, and the member’s interest in the Plan.
11. Limitations
This section provides specific legal limits on the order.
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12. Taxation
This section explains that any payments made to the alternate payee, who is a spouse or former spouse, will be subject to the appropriate federal, state, and local taxes.
13. Constructive Receipt
This section outlines what the member and the alternate payee are required to do if either receives benefits from the Plan that should have been paid to the other party.
14. Certification of Necessary Information
This section explains that the court may require the member and the alternate payee to certify in writing that the information on which this order is based is accurate.
Note: Only original
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STATE OF _________________ CASE # ___________________
COUNTY OF _______________
IN THE ____________________ COURT OF ________________
IN RE TO THE MARRIAGE OF:
__________________________________________
Petitioner and
__________________________________________
Respondent
Qualified Domestic Relations Order (Defined Contribution Plan)
This order creates and recognizes the existence of an alternate payee’s right to receive a portion of the member’s benefits payable under the FRS Investment Plan, which is qualified under Section 401 of the Internal Revenue Code (the “Code”). This order is intended to be a qualified domestic relations order (“QDRO”), as that term is defined in section 206(d) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and section 414(p) of the Internal Revenue Code of 1986, as amended (“Code”). This order is entered pursuant to the authority granted under the applicable domestic relations laws of the State of _________________________________.
1. Plan
This order applies to the FRS Investment Plan (the “Plan”)
Any successor to this plan shall also be subject to the terms of the order.
2. Member
The name, address, Social Security number, and date of birth of the member are as follows:
Name:
Address:
Social Security Number:
Date of Birth:
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3. Alternate Payee
The person named as alternate payee meets the requirements of the definition of alternate payee as set forth in Section 4 of this order. The alternate payee’s name, address, Social Security number, date of birth, and relationship to the member are as follows:
Name:
Address:
Social Security Number:
Date of Birth:
Relationship to Member:
The alternate payee shall be responsible for notifying the Plan Administrator in writing of any changes in his or her mailing address subsequent to the submission of this order.
4. Marital History
Date of Marriage:
Date of Divorce:
5. Definitions
Alternate
Liquidation
Marital
Number of Marital Years (from the Date of Marriage to the Date of Divorce) while accruing benefits under the Plan
Years of Service during which the
member has accrued a benefit under the Plan up to the Transfer Date (the date the member’s benefit transferred into the Investment Plan)
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Plan
Transfer Date— The Transfer Date is the date the member transferred a benefit from the FRS Pension Plan (Defined Benefit Plan) into the FRS Investment Plan via an accumulated benefit obligation.
Valuation
Vested Account
6. Benefit Payable to the Alternate Payee
(Choose Option A, Option B, or Option C. You may not choose more than one option)
Option A. Straight Percentage
The order assigns to the alternate payee an amount equal to _______ % of the member’s Vested
Account Balance under the Plan (identified in Section 1) as of ____________________ (insert
applicable Valuation Date).
From the Valuation Date to the liquidation date, the amount assigned to the alternate payee (select one):
Will be adjusted for investment earnings (gains and losses) from the Valuation Date to the date as of which the account is established for the Alternate Payee.
Will not be adjusted for investment earnings (gains and losses) from the Valuation Date to the date as of which the account is established for the Alternate Payee.
Option B. Dollar Amount
This order assigns to the alternate payee an amount equal to $_______ of the member’s Vested
Account Balance under the Plan (identified in Section 1) as of the liquidation date.
Option C. Marital Fraction
This order assigns to the alternate payee an amount equal to _______ % of the “marital interest” (as
defined in Section 4 and 5 above) in the participant’s account balance under the Plan (identified in Section 1) as of the Transfer Date.
7. Form of Payment
The alternate payee is eligible for any available form of payment under the provisions of the FRS Investment Plan.
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8. Commencement
The alternate payee shall be eligible to receive payment as soon as administratively reasonable following the determination that this order is a Qualified Domestic Relations Order. In no event can the alternate payee begin his or her benefit later than April 1 following the year in which the member attains age
9. Death Procedures
If the member predeceases the alternate payee prior to payment of the alternate payee’s assigned benefits under the QDRO, the alternate payee’s benefits will not be affected. In the event of the member’s death, the account balance, which remains the property of the member, will be payable to the member’s designated beneficiary or in accordance with Plan provisions. This order does not require the member to name the alternate payee as the beneficiary for the benefits not assigned to the alternate payee.
In case of the death of the alternate payee prior to distribution of the alternate payee’s benefits under the QDRO, the assigned benefits will be paid to the alternate payee’s designated beneficiary or, if none, in accordance with Florida law (Section 121.4501(20).
10. Retention of Jurisdiction
This matter arises from an action for divorce or legal separation in this court under the case number set forth at the beginning of this order. Accordingly, this court has jurisdiction to issue this order.
In the event the Plan Administrator determines that this order is not a Qualified Domestic Relations Order, both parties shall cooperate with the Plan Administrator in making any changes needed for it to become qualified. This includes signing all necessary documents. For this purpose, this court expressly reserves jurisdiction over the dissolution proceeding involving the member, the alternate payee, and the member’s interest in the Plan. This Order hereby vacates any previously issued QDRO in this case.
11. Limitations
Pursuant to Section 414(p)(3) of the Code and except as provided by Section 414(p)(4), this order:
(i)Does not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan;
(ii)Does not require the Plan to provide increased benefits; and
(iii)Does not require the payment of benefits to an alternate payee that is required to be paid to another alternate payee under another order previously determined to be a Qualified Domestic Relations Order.
12.Taxation
For purposes of Sections 402 and 72 of the Code, any alternate payee who is the spouse or former spouse of the member shall be treated as the distributee of any distributions or payments made to the alternate payee under the terms of the order and, as such, will be required to pay the appropriate federal, state, and local income taxes on such distributions.
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13. Constructive Receipt
If the Plan inadvertently pays to the member any benefit that is assigned to the alternate payee pursuant to the terms of this order, the member will immediately reimburse the Plan to the extent the member has received such benefit payments and shall forthwith pay such amounts so received to the Plan within ten (10) days of receipt.
If the Plan inadvertently pays to the alternate payee any benefit that is actually payable to the member, the alternate payee must make immediate reimbursement. The alternate payee must reimburse the Plan to the extent he or she has received such benefit payments and shall forthwith pay such amount so received to the Plan within ten (10) days of receipt.
14. Effect of Plan Termination
If the Plan is terminated, the alternate payee shall be entitled to receive his or her portion of the member’s benefits as stipulated herein in accordance with the Plan’s termination provisions for members and beneficiaries.
15. Certification of Necessary Information
All payments made pursuant to this order shall be conditioned on the certification by the alternate payee and the member to the Plan Administrator of such information as the Plan Administrator may reasonably require from such parties to make the necessary calculation of the benefit amounts contained herein.
Dated this _________ day of ____________________, ______
By the court:
__________________________________________________
Judge’s Signature
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Form Specifications
| Fact Name | Details |
|---|---|
| Purpose of QDRO | The QDRO is used to divide retirement benefits in a divorce or legal separation. |
| Applicable Plan | This QDRO pertains specifically to the Florida Retirement System Investment Plan. |
| Member Information | It requires the member's name, address, Social Security number, and date of birth. |
| Alternate Payee Details | Information about the alternate payee, including their relationship to the member, must be provided. |
| Governing Law | The QDRO is governed by Florida law and must be court-certified to be valid. |
Qdro: Usage Guidelines
Filling out the QDRO form is a crucial step in ensuring that benefits are properly assigned according to the court's orders. By following these steps carefully, you can help ensure that the process goes smoothly and that all necessary information is included for approval.
- Plan: Specify the defined contribution plan name, which is the Florida Retirement System Investment Plan (FRS Investment Plan).
- Member: Provide the following details about the member whose benefits are being assigned:
- Complete name
- Current mailing address (including ZIP Code)
- Social Security number
- Date of birth
- Alternate Payee: Fill in the information for the alternate payee:
- Complete name
- Current mailing address (including ZIP Code)
- Social Security number
- Date of birth
- Relationship to member
- Marital History: Enter the dates of marriage and divorce for the participant and the alternate payee.
- Definitions: Familiarize yourself with any defined terms that will be used throughout the order.
- Benefit Payable to the Alternate Payee: Choose one of the following options to specify the benefit:
- Option A: Provide the percentage of the member’s Vested Account Balance to be assigned, the valuation date, and whether the benefit will be adjusted for earnings/losses.
- Option B: Specify the dollar amount of the member’s Vested Account Balance to be assigned.
- Option C: If applicable, provide the percentage of the marital interest in the member’s vested accrued benefit to be assigned.
- Form of Payment: Describe the intended form of payment to the alternate payee, typically a lump-sum cash distribution.
- Commencement: State when payments to the alternate payee will begin, usually as soon as possible after qualification.
- Death Procedures: Outline the procedures for payments in the event of death of either party.
- Retention of Jurisdiction: Specify requirements if the order is not initially qualified and reserve jurisdiction over the dissolution proceeding.
- Limitations: Include any specific legal limits applicable to the order.
- Taxation: Acknowledge that payments will be subject to federal, state, and local taxes.
- Constructive Receipt: Clarify what both parties must do if benefits are received that should have been paid to the other.
- Certification of Necessary Information: Note that the court may require certification of the accuracy of the information provided.
Your Questions, Answered
What is a QDRO?
A Qualified Domestic Relations Order (QDRO) is a legal order that recognizes the right of an alternate payee, typically a spouse or former spouse, to receive a portion of the benefits from a defined contribution plan, such as the Florida Retirement System Investment Plan. This order is crucial in divorce proceedings as it allows for the division of retirement assets in a manner that complies with legal requirements.
What information is required to complete the QDRO form?
To complete the QDRO form, you need to provide specific details about both the member and the alternate payee. This includes full names, current mailing addresses, Social Security numbers, and dates of birth. Additionally, you must include information about the marital history, including the dates of marriage and divorce. It is essential to fill in every line to ensure the order meets approval qualifications.
How do I choose the benefit amount for the alternate payee?
When specifying the benefit amount for the alternate payee, you have three options: Option A (Straight Percentage), Option B (Dollar Amount), and Option C (Marital Interest). Each option requires different information. For example, Option A requires the percentage of the member’s vested account balance, while Option B requires a specific dollar amount. You must select only one method and cannot combine them.
When does payment to the alternate payee begin?
Payment to the alternate payee typically begins as soon as administratively possible after the QDRO has been determined to be qualified. This means that once the necessary approvals are obtained, the plan will process the payments without unnecessary delays.
What happens if either party dies?
The QDRO includes specific procedures for the payment of benefits in the event of the death of either the member or the alternate payee. These procedures ensure that the benefits are handled appropriately and according to the stipulations outlined in the order, protecting the interests of both parties.
Are there tax implications for the payments made under a QDRO?
Yes, any payments made to the alternate payee, who is a spouse or former spouse, are subject to federal, state, and local taxes. It is important for both parties to understand the tax implications of these payments and to plan accordingly to avoid any unexpected financial consequences.
Common mistakes
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Incomplete Information: Many individuals neglect to fill out every required field in the QDRO form. Missing information can lead to delays in processing or even rejection of the order. Ensure that all sections, especially those related to the member and alternate payee, are fully completed.
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Incorrect Plan Identification: Some people mistakenly fail to specify the correct defined contribution plan. The plan name must be accurately stated as the Florida Retirement System Investment Plan. Errors in this section can cause confusion and complicate the approval process.
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Improper Selection of Benefit Division Method: Individuals often choose multiple methods for dividing benefits, which is not allowed. It is crucial to select only one method—whether it be a percentage, a dollar amount, or a marital fraction. Mixing these options can invalidate the QDRO.
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Failure to Provide Accurate Dates: Dates of marriage and divorce are vital for determining the marital fraction. Errors or omissions in these dates can lead to incorrect calculations and disputes later on. Double-check these details for accuracy.
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Neglecting Tax Implications: Many overlook the section that discusses taxation of benefits. Understanding that payments made to an alternate payee may be subject to taxes is crucial. Failing to consider this can result in unexpected financial liabilities.
Documents used along the form
A Qualified Domestic Relations Order (QDRO) is a legal document that outlines how retirement benefits will be divided in the event of a divorce. Along with the QDRO form, several other documents are often necessary to ensure a smooth process. Here is a list of those documents, along with brief descriptions of each.
- Divorce Decree: This court order finalizes the divorce and often includes terms regarding the division of assets, including retirement accounts.
- Marital Settlement Agreement: This document outlines the agreements made between spouses regarding the division of property and debts, including retirement benefits.
- Plan Information Document: This provides details about the retirement plan, including benefits, eligibility, and distribution options.
- Retirement Account Statements: Recent statements from the retirement account show the current balance and help in determining the amount to be divided.
- Financial Affidavit: This document provides a snapshot of each spouse's financial situation, including income, expenses, assets, and liabilities.
- Tax Returns: Copies of recent tax returns may be necessary to evaluate the financial standing of both parties and the tax implications of asset division.
- Identification Documents: Copies of driver's licenses or Social Security cards may be required for verification purposes.
- Proof of Marriage and Divorce: Marriage certificates and divorce papers establish the legal relationship and timeline necessary for the QDRO.
- Notification Letters: These letters inform the retirement plan administrator about the divorce and the impending QDRO.
Having these documents ready can streamline the process of obtaining a QDRO. Each document plays a crucial role in ensuring that the division of retirement benefits is handled fairly and legally.
Similar forms
- Qualified Domestic Relations Order (QDRO): The QDRO is a legal order that outlines how retirement benefits will be divided between spouses during a divorce. It provides specific instructions on the amount and timing of payments to the alternate payee, similar to the FRS Investment Plan QDRO form.
- Marital Settlement Agreement: This document details the terms agreed upon by both parties regarding the division of assets, including retirement accounts. Like the QDRO, it aims to ensure that both parties understand their rights and obligations.
- Divorce Decree: The divorce decree is the final order issued by the court that legally ends a marriage. It often includes provisions for the division of retirement assets, similar to the QDRO, ensuring that the division is recognized by the retirement plan.
- Retirement Plan Benefits Statement: This statement provides details about the retirement account, including balances and benefits. It serves as a reference for the QDRO, ensuring that the amounts to be divided are accurate and up-to-date.
- Domestic Relations Order (DRO): A DRO is a broader term that encompasses any court order affecting the rights of a spouse or child to receive benefits from a retirement plan. The QDRO is a specific type of DRO focused on retirement benefits.
- Beneficiary Designation Form: This form allows individuals to designate who will receive their retirement benefits upon their death. While it does not divide benefits like a QDRO, it is crucial for ensuring that the correct individuals receive benefits, similar to how a QDRO specifies payments to an alternate payee.
Dos and Don'ts
When filling out the QDRO form, it is important to follow specific guidelines to ensure accuracy and compliance. Here are four key do's and don'ts:
- Do fill in every line where information is requested. Incomplete forms may lead to delays in processing.
- Do double-check all names, addresses, and dates for accuracy. Errors can complicate the approval process.
- Don't use a combination of methods for specifying the benefit amount. Choose only one option from the provided methods.
- Don't forget to attach any necessary documents that support the information provided, especially if it includes sensitive details like Social Security numbers.
Misconceptions
Misconceptions about the Qualified Domestic Relations Order (QDRO) form can lead to confusion and errors in the process of dividing retirement benefits. Below are nine common misconceptions along with explanations to clarify each one.
- All QDROs are the same. Each QDRO can be tailored to the specific circumstances of the individuals involved. There is no one-size-fits-all approach.
- A QDRO guarantees immediate payment. While a QDRO sets the framework for benefit division, actual payments may not occur until administrative processes are complete.
- Only attorneys can prepare a QDRO. While legal assistance is beneficial, individuals can also use model language provided in the QDRO instructions to draft their own orders.
- All benefits can be divided. Only certain types of retirement benefits are eligible for division under a QDRO. It is essential to confirm that the plan in question qualifies.
- Once a QDRO is submitted, it cannot be changed. Modifications can be made, but they must go through the proper legal channels and be re-approved by the court.
- Filling out the QDRO form is straightforward and requires no attention to detail. Every line must be completed accurately. Missing or incorrect information can lead to delays or disqualification.
- Tax implications are not a concern with QDROs. Payments made under a QDRO may be subject to taxes, which should be considered during the drafting process.
- All courts recognize QDROs equally. Different jurisdictions may have varying requirements for QDRO approval. It is crucial to understand local rules.
- Once a QDRO is approved, it is final. While the order may be approved, ongoing obligations and potential disputes can arise, necessitating further legal action.
Understanding these misconceptions can help individuals navigate the QDRO process more effectively, ensuring that retirement benefits are divided fairly and in accordance with legal requirements.
Key takeaways
When filling out and using the QDRO form, there are several important points to keep in mind. Understanding these can help ensure that the process goes smoothly and meets all necessary requirements.
- Complete Information is Essential: Fill in every line of the QDRO form. Missing information can lead to delays or rejection of the order.
- Choose One Method for Division: You must select one method for dividing benefits—either a straight percentage, a dollar amount, or a marital fraction. Mixing methods is not allowed.
- Documentation is Key: It is acceptable to attach documents that contain sensitive information, like Social Security numbers, as long as they are referenced in the QDRO.
- Understand Tax Implications: Payments made to an alternate payee may be subject to federal, state, and local taxes. Be prepared for this when planning for distributions.