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401(K) Plans

The division of a 401(K) plan (a defined contribution plan) is somewhat simple in comparison to a pension plan (defined benefit pension plan). Your QDRO attorney will not have to worry about things such as preretirement or post retirement survivor annuities, cost of living adjustments and the like. In dividing a 401(K) plan, the QDRO attorney must consider whether there is any premarital separate interest and, if so, what is the value of the premarital separate interest. Only the amount contributed by the employer and the employee during the term of the marriage is considered community property subject to division. The QDRO attorney must also consider what accounts within the 401(K) plan are pre-taxed accounts and after tax accounts. The QDRO attorney must also consider whether there are any loans against the account and how to divide the 401(K) plan while either including or excluding the loan. The QDRO attorney must know how to deal with dividing a 401(K) plan when not all of the funds contributed into the plan by the employer are vested.

Because the division of 401(K) plans, 403(b) plans, 457 plans and other deferred compensation plans are so complicated, divorce attorneys usually do not divide these types of retirement plans even if they handled the divorce case. Generally the divorce attorney refers the QDRO work to a QDRO attorney.