Protecting Dad’s Final Wishes: Kari’s Fight for Plan Document Integrity

A Narrative Story of Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 555 U.S. 285 (2009)

Kari Kennedy* sat in the lawyer’s office, staring at the DuPont benefits statement in disbelief. Her father, William, had died just months earlier, and as executrix of his estate, she faced an impossible situation. The $400,000 from William’s savings and investment plan had been paid directly to Liv, his ex-wife from a marriage that ended seven years earlier.

What made this so painful was knowing her father had clearly moved on and had even updated his other retirement plan to name Kari as beneficiary. The 1994 divorce decree seemed crystal clear—it stated that Liv was “divested of all right, title, interest, and claim” to any retirement plans related to William’s employment. Liv had waived her rights, so how could DuPont simply ignore that?

Kari felt anger and confusion. Her father had been meticulous about finances and clearly intended for his estate to receive these benefits. Why would he leave this beneficiary designation unchanged if he wanted Liv to receive such a substantial sum?

The legal battle brought waves of stress and uncertainty. When the District Court initially ruled in favor of the estate, Kari felt relief and validation. The court recognized that Liv’s waiver was “explicit, voluntary, and made in good faith.” But the Fifth Circuit reversed, ruling that because the divorce decree wasn’t a Qualified Domestic Relations Order (QDRO), it couldn’t override Liv’s beneficiary designation. Kari felt devastated—the legal system seemed to prioritize technicalities over her father’s intentions.

When the Supreme Court issued its unanimous decision, Kari experienced profound validation and empowerment. The Court held that plan administrators must honor the beneficiary designation on file, even when a divorce decree purports to waive the beneficiary’s interest, unless there’s a proper QDRO.

Justice Souter’s opinion resonated deeply with Kari’s understanding. The Court recognized that ERISA requires plan administrators to manage plans “in accordance with the documents and instruments governing them.” Allowing external waivers to override official plan documents would create chaos in the retirement system.

The Court validated that plan participants should have “a clear set of instructions for making his own instructions clear.” Her father had followed proper procedures for some retirement plans but left the SIP designation unchanged. Under ERISA’s framework, that designation had to be honored.

While Liv kept the $400,000, Kari found unexpected comfort in the Court’s reasoning. The decision protected a system allowing people to make clear, binding decisions about retirement benefits. Her father had the power to change his beneficiary but chose not to exercise it.

Kari realized her father’s case established crucial precedent protecting countless families. The Supreme Court affirmed that retirement plan beneficiary designations can’t be casually overridden by external documents. The experience gave her purpose, knowing the legal framework now ensures plan administrators follow clear, objective rules rather than getting entangled in complex disputes over external waivers.

*This story is based on the true facts of the appellate court’s decision, but the personal experiences and emotions described are a fictional representation to bring the case to life.

Question: What are the two main types of retirement plans in a Minnesota divorce?

Answer: There are two main types of retirement plans that work differently – defined contribution plans where you have your own account, and defined benefit plans where you get a set monthly payment when you retire.

In general, there are two categories of retirement plans: defined benefit plans, see ERISA § 3(34) (29 U.S.C. § 1002(34)); 26 U.S.C. § 414(i); and defined contribution plans, see ERISA § 3(35) (29 U.S.C. § 1002(35)); 26 U.S.C. § 414(j). Understanding the type of plan (defined benefit or defined contribution) is critical for determining how a QDRO should be drafted.

Question: How do defined contribution plans work?

Answer: In defined contribution plans, each worker has their own account where money goes in and grows or shrinks based on how well the investments do.

Under a defined contribution plan, each participant (i.e., an employee who is eligible to participate in the plan) has one or more individual accounts. The benefit payable to the participant is based solely upon the amounts contributed to the participant’s accounts; any income, expenses, gains, and losses allocated to the participant’s accounts; and any forfeitures from the accounts of other participants that may be allocated to the participant’s accounts. See ERISA § 3(34) (29 U.S.C. § 1002(34)); 26 U.S.C. § 414(i).

Question: What types of contributions can be made to defined contribution plans?

Answer: Different types of defined contribution plans have different rules about how much money the employer puts in – some are optional and some are required.

The plan document will describe the types of contributions made to a defined contribution plan. For example, a profit-sharing plan usually provides that the employer may, at its discretion, contribute an amount determined by its board of directors for a particular plan year, which will then be allocated to participants’ accounts based on the compensation paid to them during that plan year. On the other hand, under a money purchase pension plan, the employer must contribute for each participant the percentage of compensation specified in the plan document.

Question: How do 401(k) contributions work?

Answer: In a 401(k) plan, you choose how much of your paycheck to save, and your employer might add extra money to match some of what you put in.

Under a 401(k) plan, contributions are based on the amount that the participant chooses to contribute from their compensation. For example, a participant may elect to defer 10 percent of their pay each pay period. Those contributions, called “salary deferral contributions,” may be made on a pre-tax basis or on an after-tax basis as Roth deferrals. See 26 U.S.C. §§ 402(g)(3); 402A. The employer may also provide an additional contribution, called a “matching contribution,” on some portion or all of the employee’s deferrals.

Question: Can I move money from other retirement plans or borrow from my account?

Answer: Many retirement plans let you move money from old jobs into your current plan, and some let you borrow money from your own account.

In many defined contribution plans, employees have the right to rollover distributions from another employer’s qualified plan and may have the right to take a loan against their accounts. These amounts will be credited to separate accounts within the plan.

Question: How are defined contribution plan investments managed?

Answer: Most retirement plans invest your money in stocks, bonds, and cash, and you can usually choose from different investment options, with your account value updated regularly.

The assets in defined contribution plans are generally invested in a mixture of cash, equities, and bonds. In many cases, the participant can direct the investment of their accounts and can select from a variety of mutual funds. An “employee stock ownership plan” (ESOP) is a type of defined contribution plan that is designed to have participants’ accounts invested in the employer’s common stock. The participant’s accounts in a defined contribution plan must be valued at least once a year, typically on the last day of the plan year. Therefore, participants’ accounts in an ESOP are only valued once per year. However, other types of defined contribution plans may provide for quarterly or daily valuation.

Question: When do I become fully vested in my employer’s contributions?

Answer: You become fully entitled to your employer’s contributions after working for up to six years, but any money you put in yourself is always yours.

Employers’ contributions may be subject to vesting schedules. At a minimum, a participant must be 100-percent vested in their accounts after completing six years of vesting service; however, in many cases, the plan will provide for a faster vesting schedule. The participant must also be 100-percent vested at normal retirement age, as defined by the plan. A participant’s own 401(k) salary deferrals are always 100-percent vested. See ERISA § 203(a) (29 U.S.C. § 1053(a)); 26 U.S.C. § 411(a).

Question: How do I get my money out of a defined contribution plan?

Answer: Most defined contribution plans pay you all your money at once when you leave your job, though some offer monthly payments or other options.

Defined contribution plans typically provide for payment in a single lump-sum when an employee terminates employment. Some plans will offer other forms of distribution, such as installment payments or annuities, and may permit distributions under certain circumstances while the employee is still working. Some ESOPs will permit a lump sum distribution but only if the account balance is under a specified dollar amount; otherwise, the account must be distributed in installments. Many defined contribution plans allow alternate payees to receive immediate lump-sum payments, even if the participant is not currently eligible for a distribution from the plan. In addition, the alternate payee may have the right to rollover the distribution to an individual retirement account (IRA) or certain other retirement savings vehicles to postpone the taxes that would otherwise be payable on the distribution.

Question: What is a defined benefit plan?

Answer: A defined benefit plan is any retirement plan that doesn’t give you your own individual account.

Simply put, a defined benefit plan is a plan that is not an individual account plan. See ERISA § 3(35) (29 U.S.C. § 1002(35)); 26 U.S.C. § 414(j). Defined benefit plans have some unique characteristics, which are described below.

Question: Who pays into defined benefit plans?

Answer: In most defined benefit plans, only the employer puts money in, and the amount depends on complicated calculations done by experts.

In most cases, participants do not make contributions to a defined benefit plan. Instead, the employer has an obligation to make contributions that will fund the benefits that have been promised. The amount of the contribution will be determined by an actuary and will depend on a number of factors, such as the benefit formula, earnings assumptions, ages of participants, and distributions allowed under the plan.

Question: How much will I get from my defined benefit plan?

Answer: Defined benefit plans promise you a specific monthly payment when you retire, usually based on how long you worked and how much you earned.

Defined benefit plans promise a specific benefit to participants payable at a specific age. Usually, the benefit formula provides a life annuity payable at normal retirement age (often, age 65); however, the participant may be able to start the benefit at an earlier age. Defined benefit plan formulas can be complicated and are usually based on the participant’s compensation history and/or years of service.

Question: What is an accrued benefit in a defined benefit plan?

Answer: Your accrued benefit is the monthly payment you’ve earned so far, which gets calculated using a formula based on your years of work and salary.

A participant’s accrued benefit is the benefit the participant is entitled to receive on a specific date. For example, assume that a participant worked for an employer for 10 years, and her final average monthly pay (as defined in the plan) was $4,000. Applying the formula in Example 1 above, the participant’s accrued benefit would be $400 (10 years divided by 30, multiplied by 30 percent, multiplied again by $4,000). Thus, when this participant reaches normal retirement age, they will be entitled to a life annuity equal to $400 per month. In some plans, the accrued benefit may be offset by a benefit provided under another plan. Further, if this participant started receiving their accrued benefit before normal retirement age, the $400 monthly benefit would be actuarially reduced to reflect the fact that they will be receiving their benefit over a longer period of time. Finally, some defined benefit plans, called “cash balance plans,” determine the benefit from amounts credited to the participant’s hypothetical account in the plan and may appear to the attorney as a defined contribution plan.

Question: When do I become vested in my defined benefit plan?

Answer: Most defined benefit plans require you to work for five years before you’re fully vested, though some plans make you vested right away.

Similar vesting rules apply to defined benefit plans. Many defined benefit plans require that the participant earn five years of vesting service before they are 100-percent vested. Other plans, such as cash balance plans, may provide that participants are 100-percent vested at all times. See ERISA § 203(a) (29 U.S.C. § 1053); 26 U.S.C. § 411(a).

Question: How do I receive payments from my defined benefit plan?

Answer: Defined benefit plans must offer monthly payments for life, and married people get special protection so their spouse gets some money if they die first.

Defined benefit plans must offer annuities as a distribution option. Single participants must receive their benefit in the form of a life annuity, unless they elect a different form of benefit. Married participants must receive their benefit in the form of a qualified joint and survivor annuity (a life annuity that pays some portion of the benefit to the surviving spouse), unless the spouse consents to a different distribution form. See ERISA § 205 (29 U.S.C. § 1055); 26 U.S.C. § 40(a)(11). Defined benefit plans often offer other types of annuities or payments over a fixed period and, in some cases, lump-sum distributions. Defined benefit plans often permit payment earlier than normal retirement age, such as at a specified early retirement age or in the event of disability. Since the benefit is usually expressed as a single life annuity payable at normal retirement age, actuarial assumptions will apply to convert the benefit to the other distribution forms allowed under the plan and/or payment at an earlier age. In some cases, this conversion will reflect an employer subsidy. For example, a plan may provide that the monthly amount of benefits payable at age 60 will be the same as the monthly amount of benefits payable at age 65 if the participant had 10 years of vesting service when they retired.

Question: Can a QDRO be done before or after the divorce decree?

Answer: Yes a QDRO can be created either during your divorce or after it’s finished, but there’s no federal rule about when it has to be done.

A qualified domestic relations order may be entered either as part of a divorce decree or as a separate order after the decree. ERISA requires that a domestic relations order be approved by the plan administrator and that it satisfy the statutory requirements to be “qualified.” See 29 U.S.C. § 1056(d)(3). There is no federal mandate on the timing of a QDRO; it may be signed before the final judgment or afterwards. In practice, many attorneys prepare and submit QDROs at the time of the divorce to ensure that the retirement benefits division is executed promptly, but courts often reserve jurisdiction to enter a QDRO later if the plan information is not yet available.

Question: What happens if I wait to do my QDRO after the divorce?

Answer: If you wait to create a QDRO after your divorce, you should do it quickly because problems can happen if the person retires or dies first.

If a QDRO is not prepared until after the divorce, the parties should act quickly to avoid complications. A participant’s death, retirement, or commencement of benefits can affect the availability of benefits to the alternate payee. Some courts have held that once benefits are in pay status, it may be more difficult to divide them through a QDRO. For governmental plans like PERA, a separate domestic relations order is not required; instead, the language dividing the benefit may be included in the divorce judgment, and PERA will implement it without a QDRO. Nevertheless, timely drafting of an appropriate order helps secure benefits and reduces the risk of loss due to unforeseen events.

Question: When can I and my spouse get our retirement money when its been divided in the divorce?

Answer: Usually, your ex-spouse can only get their share when you get your retirement money. As a general rule, the alternate payee may receive a distribution when the participant receives a distribution. See ERISA § 206(d)(3)(D)(i) (29 U.S.C. § 1056(d)(3)(D)(i)); 26 U.S.C. § 414(p)(3)(A). However there are exceptions as seen in the answers below. 

Question: Can my ex-spouse get retirement money before I retire?

Answer: Your ex-spouse might be able to get money when you reach your earliest retirement age, even if you keep working, but there are special rules about how much they get.

Payments may begin on or after the participant’s “earliest retirement age” if all of the following requirements are satisfied: (1) No Separation from Service. If the participant has not separated from service, payment is made on or after the date on which the participant attains (or would have attained) the “earliest retirement age.” 3. Exception – Distributions Before the Earliest Retirement Date Legislative history indicates that a plan can create a special distribution option for alternate payees that is not otherwise available to participants. See Explanation of Technical Corrections to the Tax Reform Act of 1984 and Other Recent Tax Legislation, Title XVIII of H.R. 3838, 99th Cong. (1987); I.R.S. Priv. Ltr. Rul. 87-44-023 (Aug. 3, 1987); I.R.S. Priv. Ltr. Rul. 87-43-102 (Aug. 3, 1987). Thus, some plans, including defined benefit plans, permit immediate lump-sum distributions to alternate payees. By offering an immediate lump-sum distribution, the (2) Present Value of Benefits. Payment is made as if the participant had retired on the date on which payment is to begin under the order, but taking into account only the present value of the participant’s accrued benefits and not the value of any employer subsidy for early retirement. In this case, the present value of the participant’s accrued benefit is determined using the interest rate specified in the plan or, if no rate is specified, using the rate of five percent. (3) Form of Payment. Payment is made in any form in which such benefits may be paid under the plan to the participant, except in the form of a joint and survivor’s annuity with respect to the alternate payee and their subsequent spouse. See ERISA § 206(d)(3)(E) (29 U.S.C. § 1056(d)(3)(E)); 26 U.S.C. § 414(p)(4)(A). The participant’s “earliest retirement age” is the earlier of: (1) the date on which the participant is entitled to a distribution under the plan; or (2) the later of (a) the date the participant attains age 50, or (b) the earliest date on which the participant could begin receiving benefits under the plan if the participant had separated from service. See ERISA § 206(d)(3)(E)(ii) (29 U.S.C. § 1056(d)(3)(E)(ii)); 26 U.S.C. § 414(p)(4)(B).

Question: Can retirement plans give my ex-spouse money right away?

Answer: Some retirement plans can create special rules that let your ex-spouse get all their money right away, which makes things simpler for everyone.

Legislative history indicates that a plan can create a special distribution option for alternate payees that is not otherwise available to participants. See Explanation of Technical Corrections to the Tax Reform Act of 1984 and Other Recent Tax Legislation, Title XVIII of H.R. 3838, 99th Cong. (1987); I.R.S. Priv. Ltr. Rul. 87-44-023 (Aug. 3, 1987); I.R.S. Priv. Ltr. Rul. 87-43-102 (Aug. 3, 1987). Thus, some plans, including defined benefit plans, permit immediate lump-sum distributions to alternate payees. By offering an immediate lump-sum distribution, the alternate payee can receive an immediate benefit, and the plan administrator avoids the possibility of having to administer the QDRO over a period of years.

Question: Can my ex-spouse get extra retirement benefits if I retire early?

Answer: If the QDRO is written correctly, your ex-spouse can get a share of any extra benefits you receive for retiring early.

Legislative history indicates that ERISA § 206(d)(3)(E)(i)(II) (29 U.S.C. § 1056(d)(3)(E)(i)(II)) and 26 U.S.C. § 414(p)(4)(A)(ii) do not necessarily prevent an alternate payee from sharing in an early retirement subsidy if the participant later receives it. See S. Rep. No. 98575, at 21 (1984). If properly drafted, the order can provide that the amount payable to the alternate payee shall be recalculated so that the alternate payee also receives a share of the participant’s subsidized benefit. Doing so will not violate the prohibition against providing for increased benefits. Id.; see also 130 Cong. Rec. H876162 (daily ed. Aug. 9, 1984) (statement of Rep. Clay, example 4).

Question: Can my ex-spouse get survivor benefits from my pension?

Answer: A QDRO can make your ex-spouse eligible for survivor benefits from your pension, which might reduce what a new spouse would get.

QDROs May Treat the Alternate Payee as the Surviving Spouse The DRO may provide that the alternate payee shall be treated as the participant’s surviving spouse. See ERISA § 206(d)(3)(F) (29 U.S.C. § 1056(d)(3)(F)); 26 U.S.C. § 414(p)(5). By doing so, the former spouse can claim survivors’ benefits under the participant’s pension. While this provision may reduce the benefits payable to a subsequent spouse, the DRO will usually provide this protection to the alternate payee only with respect to the portion of the benefit assigned to them.

Question: What are the two main ways to write a QDRO?

Answer: QDROs can be written in two ways – either your ex-spouse gets a share of your payments when you get them, or they get their own separate account.

In general, QDROs may be drafted in one of two ways: the “shared interest” approach or the “separate interest” approach. For purposes of this discussion, the “shared interest” approach will be referred to as the “sharing” method, and the “separate interest” approach will be referred to as the “dividing” method.

Question: How does the sharing method work in a QDRO?

Answer: With the sharing method, your ex-spouse gets a percentage of each payment you receive from your retirement plan.

Under the sharing method, all or a portion of the participant’s benefit is paid to an alternate payee when the participant receives payment. For example, the alternate payee may be awarded 50 percent of the monthly annuity payments made to the participant under a defined benefit plan.

Question: How does the dividing method work in a QDRO?

Answer: With the dividing method, your retirement account gets split into two separate parts – one for you and one for your ex-spouse.

Under the dividing method, the participant’s accrued benefit or account balance is divided into two parts. One part becomes the alternate payee’s benefit, and the remainder continues to be the participant’s benefit. The alternate payee generally has the same rights as a participant. The alternate payee may request a distribution in any form permitted under the plan but cannot request payment in the form of qualified joint and survivor annuity with a subsequent spouse. The timing of the alternate payee’s distribution will depend on the terms of the plan document.

Question: What counts as a domestic relations order?

Answer: A domestic relations order includes court judgments, decrees, or orders, including approved property settlement agreements.

The term “domestic relations order” means a judgment, decree, or order, including the approval of a property settlement agreement. See ERISA § 206(d)(3)(B) (29 U.S.C. § 1056(d)(3)(B)); 26 U.S.C. § 414(p)(1)(B). Usually, the plan administrator will request a certified copy of the final executed order.

Question: What topics make it a domestic relations order?

Answer: A domestic relations order must be about child support, alimony, or dividing marital property between spouses, ex-spouses, children, or dependents.

The DRO must relate to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant. See ERISA § 206(d)(3)(B)(ii)(I) (29 U.S.C. § 1056(d)(3)(B)(ii)(I)); 26 U.S.C. § 414(p)(1)(B)(i). Plan administrators are not required to verify that the alternate payee is a spouse, former spouse, child, or other dependent of the participant. See U.S. Dep’t of Labor Advisory Opinion 199217A (Aug. 21, 1992).

Question: What state law must apply to a domestic relations order?

Answer: The domestic relations order must be made under state divorce or family law, and it should clearly say which state’s law applies.

The DRO must be made pursuant to a state domestic relations law, including a community property law. See ERISA § 206(d)(3)(B)(ii) (29 U.S.C. § 1056(d)(3)(B)(ii)); 26 U.S.C. § 414(p)(1)(B)(ii). The DRO should clearly state the state domestic relations law that applies.

Question: What must a domestic relations order do regarding benefits?

Answer: The domestic relations order must create or recognize your ex-spouse’s right to get part of your retirement benefits.

The DRO must create or recognize the existence of the alternate payee’s right to receive, or must assign to the alternate payee, all or a portion of the participant’s benefits. See ERISA § 206(d)(3)(B)(i)(I) (29 U.S.C. § 1056(d)(3)(B)(i)(I)); 26 U.S.C. § 414(p)(1)(A)(ii).

Question: What names and addresses must be in a QDRO?

Answer: The QDRO must include the full names and mailing addresses of both you and your ex-spouse, though the retirement plan might accept it if they already have this information.

The DRO must clearly specify the name and last known mailing address of the participant and the name and mailing address of each alternate payee covered by the order. See ERISA § 206(d)(3)(C)(i) (29 U.S.C. § 1056(d)(3)(C)(i)); 26 U.S.C. § 414(p)(2)(A). The legislative history indicates that an order will not fail this requirement if the plan administrator can obtain this information from other means. See S. Rep. No. 98-575, at 20 (1984) (“[t]he committee intends that an order will not be treated as failing to be a qualified [domestic relations] order merely because the order does not specify the current mailing address of the participant and alternate payee if the plan administrator has reason to know that address independently of the order. For example, if the plan administrator is aware that the alternate payee is also a participant under the plan and the plan records include a current address for each participant, the plan administrator may not treat the order as failing to qualify.”).

Question: How must a QDRO specify the amount of benefits?

Answer: The QDRO must clearly state exactly how much money or what percentage your ex-spouse gets, and how to calculate it.

The order must clearly specify the amount or percentage of the participant’s benefits that the plan should pay to each alternate payee, or the manner in which such amount or percentage should be determined. See ERISA § 206(d)(3)(C)(ii) (29 U.S.C. § 1056(d)(3)(C)(ii)); 26 U.S.C. § 414(p)(2)(B). Under the sharing method, the alternate payee may be assigned a portion of each annuity payment as and when it is made to the participant. Under the dividing method, the amount of the accrued benefit subject to the order must first be determined, and the amount or percentage that is assigned to the alternate payee must then be described. For example, the QDRO may provide that the alternate payee is assigned 50 percent of the present value of the participant’s accrued benefit as of the date of the order. If the participant accrued some portion of their benefit prior to the marriage, or if the participant continues to accrue benefits following the divorce, not all of the accrued benefit may be a marital asset. A participant’s accrued benefit in a defined benefit plan may be determined on any day of the year. Depending upon the benefit formula in the plan, the participant’s accrued benefit may increase on an annual or more frequent basis. Also, in some defined benefit plans, the present value of the accrued benefit increases more rapidly as the participant nears normal retirement age. These factors can have a significant impact on an alternate payee’s award if the participant continues employment with the employer for a number of years after the divorce. Many QDROs will award the alternate payee a specific percentage of the participant’s accrued benefit as of a specified date, such as the date of divorce. This method is relatively simple and easily understood by the parties. Other QDROs will use a formula to identify the portion of the benefit that accrued during the time of the marriage. In the above example, the QDRO might award the alternate payee 50 percent of the accrued benefit multiplied by a fraction (13/25, in this case) representing the length of the marriage relative to the number of years during which the participant accrued benefits under the plan.

Question: What’s a common mistake with valuation dates in QDROs?

Answer: Many QDROs fail because they don’t specify the right date for calculating account values, especially when the plan only updates values quarterly.

Many QDROs do not meet the requirements of ERISA § 206(d)(3)(C)(ii) (29 U.S.C. § 1056(d)(3)(C)(ii)) or 26 U.S.C. § 414(p)(2)(B) because they fail to define the valuation date on which the division of the account must occur. For example, a QDRO that awards 50 percent of the participant’s vested account balance as of August 23, 2024, when the plan is valued at the end of each calendar quarter, fails this requirement as the plan administrator cannot determine the balance of the participant’s accounts as of the date specified. To correct this error, the order should specify whether the valuation date immediately preceding or following the specified date will apply for purposes of determining the balance of the participant’s accounts. Many defined contribution plans permit the participant to take one or more loans against their accounts. The QDRO must address whether the balance(s) of the loan(s) should be taken into consideration when determining the amount assigned to the alternate payee, whether the alternate payee’s share includes any portion of the loan(s), and who is responsible for repaying the loan(s).

Question: What must a QDRO say about the timing of payments?

Answer: The QDRO must clearly state how many payments your ex-spouse gets and for how long, which depends on which method is used.

The DRO must clearly specify the number of payments or period to which such order applies. See ERISA § 206(d)(3)(C)(iii) (29 U.S.C. § 1056(d)(3)(C)(iii)); 26 U.S.C. § 414(p)(2)(C). Under the sharing method, the payments to the alternate payee will begin whenever the participant starts receiving payments (or, if later, when the order is determined to be a QDRO by the plan administrator). The payments might end when the participant’s payments end, or at some other specified date (such as remarriage or the date a child reaches age 18). Under the dividing method, the number of payments may depend on the form of distribution selected by the alternate payee.

Question: What retirement plans must be named in a QDRO?

Answer: The QDRO must clearly name each specific retirement plan that it applies to.

The DRO must clearly specify each plan to which the order applies. See ERISA § 206(d)(3)(C)(iv) (29 U.S.C. § 1056(d)(3)(C)(iv)); 26 U.S.C. § 414(p)(2)(D).

Question: Can a QDRO force a retirement plan to offer new benefits?

Answer: A QDRO cannot make a retirement plan offer payment options or benefits that it doesn’t already provide to regular participants.

The DRO cannot require a plan to provide any type or form of benefits, or any option, not otherwise provided under the plan. See ERISA § 206(d)(3)(D)(i) (29 U.S.C. § 1056(d)(3)(D)(i)); 26 U.S.C. § 414(p)(3)(A). Essentially, this provision means that the alternate payee may choose from among the various distribution options made available to them under the terms of the plan, but with some restrictions. ERISA § 206(d)(3)(E)(i)(III) (29 U.S.C. § 1056(d)(3)(E)(i)(III)) and 26 U.S.C. § 414(p)(4)(A)(iii) prohibit the alternate payee from selecting a joint and survivor annuity payable that would pay a survivor benefit to the alternate payee’s subsequent spouse. This prohibition applies whether payment to the alternate payee is made before or after the participant terminates employment. See S. Rep. No. 99-313, at 1106 (1986). The Pension Protection Act of 2006 prohibits defined benefit plans from making lump-sum distributions to participants (and alternate payees) if the funding percentage drops below 60 percent. Additionally, if the funding level is between 60 and 80 percent, the defined benefit plan can only pay a lump sum equal to the lesser of 50 percent of the participant’s accrued benefit or 50 percent of the Pension Benefit Guaranty Corp. guaranteed benefit. Various funding presumptions may also apply, depending on when the plan completes its actuarial valuation.

Question: Can a QDRO give my ex-spouse more benefits than I would get?

Answer: A QDRO cannot give your ex-spouse more valuable benefits than what you would normally be entitled to receive.

The DRO may not require the plan to provide increased benefits, determined on the basis of actuarial value. See ERISA § 206(d)(3)(D)(ii) (29 U.S.C. § 1056(d)(3)(D)(ii)); 26 U.S.C. § 414(p)(3)(B). The legislative history indicates that these provisions limit the alternate payee to the benefits that would be available to the participant in absence of the QDRO. See S. Rep. No. 98575, at 21 (1984). This provision would also seem to prohibit assigning the alternate payee a portion of the participant’s unvested accounts or unvested accrued benefit.

Question: Can multiple QDROs conflict with each other?

Answer: A new QDRO cannot require payments to your ex-spouse if those same benefits are already required to be paid to someone else under an earlier QDRO.

The order may not require the payment of benefits to an alternate payee that are required to be paid to another alternate payee under a previous QDRO. See ERISA § 206(d)(3)(D)(iii) (29 U.S.C. § 1056(d)(3)(D)(iii)); 26 U.S.C. § 414(p)(3)(C).