A Qualified Domestic Relations Order (QDRO) is a legal document that allows for the division of a defined contribution plan among divorcing spouses. These forms, such as the one for the Florida Retirement System Investment Plan, lay out instructions and model language to ensure the domestic relations order meets all qualifications for approval. When filled out with careful attention to every requested detail, a QDRO facilitates the equitable distribution of retirement benefits, thereby offering a measure of financial security to the parties involved.
The FRS Investment Plan Qualified Domestic Relations Order (QDRO) plays a pivotal role in the equitable division of retirement assets during a divorce, ensuring that both parties receive their fair share of the benefits accrued in a defined contribution plan. With clear explanations and model language spread across five pages, this document aims to streamline the qualification process for legal professionals and affected parties alike. It addresses key components necessary for a domestic relations order to gain approval, emphasizing the importance of complete and accurate information. Whether it is identifying the plan participant, distinguishing the alternate payee, outlining the marital history, or selecting the method of benefit distribution, each section is meticulously designed to guide users through the process. Furthermore, the QDRO form includes provisions for payment commencement, death procedures, and taxation, among others, providing a comprehensive framework for managing post-divorce retirement benefits. By following the instructions carefully and filling out every requested detail, users can facilitate a smoother transition through what can often be a complex legal requirement, ensuring that all qualifications for approval are met. Notably, the document states that only original court-certified orders can be qualified, underlining the necessity of proper legal documentation in the process.
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 court-certified orders can be qualified.
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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 cross-referenced in the domestic relations order.
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 lump-sum cash distribution. This amount reflects any earnings and losses from the liquidation date to the date of distribution to the alternate payee.
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 court-certified orders can be qualified.
END INSTRUCTIONS—MODEL LANGUAGE FOLLOWS
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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 _________________________________.
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.
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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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:
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.
Date of Marriage:
Date of Divorce:
Alternate Payee—The alternate payee is any spouse, former spouse, child, or other dependent of a member who is recognized by a domestic relations order as having a right to receive all or a portion of the benefits payable under the Plan with respect to the member.
Liquidation Date—The liquidation date is the date the amount assigned to the alternate payee is transferred from the member’s Vested Account Balance to a separate account established for the alternate payee in accordance with the terms of the QDRO. An assignment as of the liquidation date assigns a portion of the member’s current Vested Account Balance.
Marital Interest—The marital interest is the member’s account balance benefit as of the Transfer Date multiplied by the following fraction:
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 Administrator—The Florida State Board of Administration (“SBA”) is the Plan Sponsor. SBA has contracted with Hewitt Associates LLC to process domestic relations orders in accordance with the FRS Investment Plan’s QDRO requirements. Hewitt’s Qualified Order Team will conduct the qualification process.
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 Date—The Valuation Date is the date on which the member’s Vested Account Balance will be valued in order to determine the alternate payee’s designated portion in accordance with the terms of this order. Accounts are valued on a daily basis.
Vested Account Balance—The member’s Vested Account Balance is the dollar amount the member has a nonforfeitable right to receive from the Plan.
(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.
The alternate payee is eligible for any available form of payment under the provisions of the FRS Investment Plan.
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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 70-1⁄2.
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).
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.
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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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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Filling out a Qualified Domestic Relations Order (QDRO) form can be a critical step in ensuring that retirement assets are correctly divided during a divorce, directly impacting both parties' financial futures. The following steps will guide you through the process of completing the form, helping to ensure that all legal requirements are met for the division of a defined contribution plan, like the FRS Investment Plan. It's essential to carefully complete each section as accurately as possible to prevent delays or the rejection of the order.
It's important to remember that only original court-certified orders are considered qualified. Carefully reviewing and accurately completing each section as instructed can facilitate a smoother qualification process for the QDRO, ensuring the intended outcome for both parties involved.
What is a Qualified Domestic Relations Order (QDRO)?
A Qualified Domestic Relations Order (QDRO) is a legal document that is typically part of a divorce or legal separation. It allows for the division of a retirement plan or pension plan by recognizing joint marital ownership interests in the plan, specifically assigning to an alternate payee (such as a spouse, former spouse, child, or other dependent) the right to receive a portion of the account balance or benefit payments.
How do I fill out a QDRO form for the FRS Investment Plan?
To fill out a QDRO form for the Florida Retirement System (FRS) Investment Plan, you must carefully follow the instructions provided in the document. This includes specifying the plan name as the FRS Investment Plan, identifying the member and alternate payee with complete information, indicating the marital history, choosing the method for division of benefits, outlining the form of payment, and stating when the benefits to the alternate payee will commence. All requested information must be filled in accurately.
Can I choose more than one method for specifying the benefit payable to the alternate payee?
No, you cannot use more than one method for specifying the benefit payable to the alternate payee. You must select either a straight percentage method, a dollar amount method, or a marital interest method, but not a combination of these. Each method has specific instructions for how the division of benefits is to be calculated and awarded.
What happens if the member or alternate payee dies before the QDRO is implemented?
The QDRO document outlines procedures for the distribution of benefits under various circumstances, including the death of the member or alternate payee. It's crucial that these sections are reviewed and understood, as they specify how benefits should be handled in these unfortunate events to ensure that the intended parties still receive their designated share of the assets or payments.
How soon can the payment of benefits to the alternate payee begin?
Payments of benefits to the alternate payee under a QDRO can begin as soon as administratively possible after it is determined that the order is qualified. This means that once the Plan Administrator has approved the QDRO, the process for distributing the benefits according to the order’s terms will start at the earliest opportunity.
Are there any tax implications for payments made to the alternate payee under a QDRO?
Yes, any payments made to the alternate payee under a QDRO are subject to federal, state, and local taxes. It's essential for both the member and the alternate payee to understand the tax implications of the distribution of benefits, as different forms of payment may carry different tax liabilities.
What should I do if the Plan Administrator determines that the order is not qualified?
If the Plan Administrator initially determines that the order does not qualify as a QDRO, the document outlines steps that must be taken, including the possibility of court involvement. It's important that both parties retain all documentation and communications regarding the QDRO and work closely with legal or financial advisors to address any issues or requirements for the order to be qualified.
Filling out a Qualified Domestic Relations Order (QDRO) form is a critical step in ensuring the fair division of retirement benefits during a divorce. However, individuals often commit errors that can significantly impact the process. One common mistake is not accurately specifying the defined contribution plan under which the member’s benefits are being assigned. It is vital to use the exact name of the plan, such as the Florida Retirement System Investment Plan, to avoid any confusion or delays in the qualification process.
Another error occurs in the member identification section, where individuals may overlook filling in complete and accurate information about the member whose benefits are being assigned. Ensuring that details like the complete name, current mailing address, Social Security number, and date of birth are precisely provided is crucial for the clear identification of the parties involved.
When identifying the alternate payee, it is essential not to omit any required information. Some individuals may fail to provide complete details about the alternate payee, including the current mailing address, Social Security number, and date of birth. It is also important to clearly state the relationship to the member to avoid any ambiguity.
In the section detailing the marital history, people often make the mistake of not accurately providing the dates of marriage and divorce. These dates are critical for calculating the marital fraction, which determines how benefits are divided. Any inaccuracies can lead to disputes or the need for order revisions.
Choosing the method of calculating the benefit payable to the alternate payee is another area prone to mistakes. Individuals must select one of the provided options and adhere strictly to its requirements. Mixing methods or choosing an inappropriate option for the situation can invalidate the QDRO.
Specifying the form of payment incorrectly is also a common error. The document might outline preferred methods of payment, such as a lump-sum cash distribution, which should be clearly understood and indicated to ensure that the alternate payee receives benefits in the intended manner.
The commencement of payments section is crucial, and failing to specify when benefits to the alternate payee will begin can lead to unnecessary delays. It is typically expected that payment will start as soon as administratively possible, but this must be explicitly stated to set clear expectations.
Mistakes in the death procedures section can also complicate matters, especially in the unfortunate event of the death of either the member or alternate payee. It is essential to outline clearly the procedures for such scenarios to ensure that benefits are distributed according to the agreed terms.
Another area where errors frequently occur is in expressing the retention of jurisdiction. This part ensures that, should the initial order not qualify, jurisdiction remains with the court to address any issues. Failing to correctly document this can lead to legal complications down the line.
Lastly, overlooking the certification of necessary information section can be problematic. Both the member and the alternate payee may be required to certify the accuracy of the information provided. Neglecting this step can result in delays or the need for additional documentation to verify the details of the order.
When processing a Qualified Domestic Relations Order (QDRO), it's often necessary to supplement it with additional documents to ensure a smooth and precise execution of the order. These documents play a crucial role in providing detailed information, clarifying the intentions of the parties involved, and fulfilling legal requirements.
It's essential that all accompanying documents are accurate and properly submitted to avoid any delays or legal complications. Each document plays a specific role in ensuring that the division and distribution of retirement assets are carried out according to both the parties' agreement and the law. Proper attention to detail and completeness of documentation can significantly impact the outcome of the QDRO process.
A Qualified Domestic Relations Order (QDRO) shares similarities with a Separation Agreement, primarily because both documents often outline the division of assets between spouses during a divorce. While a QDRO specifically addresses the division of retirement benefits, a Separation Agreement can encompass a broader range of assets, including real estate, personal property, and investments. Both documents are integral in ensuring that each party receives a fair share of the marital assets and may require court approval to be legally enforceable.
Similar to a QDRO, a Divorce Decree is a court-issued document that finalizes the terms of a divorce, including asset division, child custody, alimony, and child support. However, a Divorce Decree might reference the existence of a QDRO as part of its terms, specifically delegating the division of retirement accounts to the QDRO. Essentially, the Divorce Decree provides the legal end to the marriage, while the QDRO executes the specific directive of dividing retirement benefits.
The Property Settlement Agreement (PSA) is another document closely related to a QDRO. The PSA details the distribution of assets and liabilities between spouses upon divorce, often including real estate, bank accounts, and debts. While a QDRO focuses exclusively on retirement plans, the PSA covers a wider array of assets. Both documents serve to legally establish how marital assets and debts are divided between the parties.
Child Support Orders, while primarily focused on arrangements for child support payments, can sometimes intersect with the purposes of a QDRO. For instance, a QDRO may be used to ensure that child support obligations are met by allocating a portion of a parent's retirement benefits to the child. Although serving different primary functions, both documents are used to secure financial arrangements that benefit family members post-divorce.
Alimony Orders are similar to QDROs in that they may facilitate the financial support of a spouse following a divorce. While alimony orders stipulate the payment of support from one spouse to another, a QDRO may also provide for the division of retirement assets to support the recipient spouse. Both documents contribute to the financial independence and security of the receiving party.
The Beneficiary Designation Form is akin to a QDRO in its impact on retirement accounts, yet it operates under different circumstances. This form indicates who will receive the proceeds of retirement, life insurance, and other accounts in the event of the account holder’s death. While a QDRO dictates the division of these assets due to divorce, beneficiary designations are activated by the death of the account holder. Both mechanisms ensure that assets are transferred to specified individuals.
A Postnuptial Agreement, much like a QDRO, addresses the division of assets within the context of a marital relationship. However, unlike a QDRO, which is a product of divorce proceedings, a postnuptial agreement is voluntarily entered into after marriage to spell out how assets would be divided in the event of a divorce or death. Both documents provide a framework for financial arrangements between spouses but differ in their timing and initiation conditions.
When filling out the Qualified Domestic Relations Order (QDRO) form for the Florida Retirement System Investment Plan or any defined contribution plan, there are several do's and don'ts to be aware of to ensure the process goes smoothly and the order meets all qualifications for approval. Here is a list of critical points to keep in mind:
Filling out the QDRO form with diligence and attention to detail can ensure a smoother process for all parties involved. Remember, errors or omissions can result in delays or the need for corrections, so it's beneficial to get it right the first time.
There are several common misconceptions about Qualified Domestic Relations Orders (QDROs) that can lead to confusion. Addressing these can help in understanding the process and the form itself.
QDROs are only for the division of pension plans: Many believe QDROs are exclusively for dividing pension plan benefits. However, they apply to any qualified retirement plan, including defined contribution plans like the one detailed for the FRS Investment Plan.
QDROs can be used for any type of payment to an ex-spouse: It’s a misconception that QDROs can direct any kind of payment to an ex-spouse. In reality, they are used specifically for assigning the right to receive all or a portion of the benefits of a retirement plan due to divorce, legal separation, or a marital settlement agreement.
Any domestic relations order qualifies as a QDRO: Not all domestic relations orders qualify as QDROs. To be considered a QDRO, the order must comply with specific requirements set forth by the plan and by law, including approval by the plan administrator.
The process is automatic: Some might think once a domestic relations order is issued, it automatically qualifies as a QDRO. However, the order must first go through a qualification process with the retirement plan's administrator to ensure it meets all necessary criteria.
There's only one way to divide benefits: People often assume there’s only one method for dividing plan benefits. As the instructions highlight, there are multiple options for specifying how benefits are divided, such as a straight percentage, a dollar amount, or a marital fraction, demonstrating the flexibility in designing a QDRO.
QDROs can assign benefits to anyone: Another misconception is that benefits can be assigned to anyone through a QDRO. In fact, QDROs typically name a spouse, former spouse, child, or other dependent as the alternate payee. The relationship to the member is a key detail that must be specified in the order.
Understanding these misconceptions and seeking accurate information about the QDRO process is crucial. This ensures that the benefits are divided according to the intentions and legal requirements, avoiding potential complications or misunderstandings.
Filling out and using a Qualified Domestic Relations Order (QDRO) form is a critical step in ensuring that division of retirement benefits is handled correctly in the case of a divorce or legal separation. Here are some key takeaways to consider:
Remember, only court-certified orders can be qualified, making it imperative to ensure all your documentation is in order before submission. These key points will help guide you through the process of filling out and using the QDRO form effectively.
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