A qualified domestic relations order (QDRO) is a special court order that forms part of a divorce proceeding. The QDRO divides and transfers pension or retirement benefits from one spouse to the other. The spouses can decide the specific amount or percentage of the retirement or pension assets, but the courts will step in when they cannot.
After determining the amount, an actuary or a lawyer prepares a QDRO specifying the circumstances of the agreement, such as the transfer amount and recipient.
The QDRO directs the retirement plan administrator to transfer the agreed amount immediately. However, in the case of pension, the QDRO orders the pension plan administrator to transfer the specified share of benefits to the non-employee spouse as the employee spouse begins to receive their share of the benefits.
Then, the spouses sign the QDRO to attest that the document's contents present the terms agreed upon during the divorce proceeding. After submitting it to the court, the judge enters and signs the QDRO as a formal court order, and the QDRO then becomes executory.
