NJ: 201.445.8711     NY: 516.305.1996

The Basics of Qualidied Domestic 
       Relations Orders (QDRO)

A Domestic Relations Order (DRO) or a Qualified Domestic Relations Order (QDRO) is a court
order which instructs a pension plan to pay an Alternate Payee (or former
spouse) a portion of retirement benefits accrued by a Participant due to an
equitable distribution agreement in a divorce. Court orders can be drafted to
assign a portion of benefits to an Alternate Payee for a variety of different
types. However, each type of plan has its own guidelines and methods for
distributing such benefits. Below is a discussion of the various types of
plans, and the manner in which they will distribute benefits between divorcing
parties.

ERISA Defined Benefit Plan

This is a private retirement plan set up by a company, union or individual that
provides a participant with a monthly income for life upon retirement.
Examples: IBM Retirement Plan, AT&T Pension Plan, Bricklayers Pension
Fund-Local 21.

When a QDRO is drafted for this type of plan, benefits may commence to the
Alternate Payee when the Participant reaches his/her earliest retirement age or
when he/she actually retires or at any time in between. The benefit is
distributed in monthly payments for either the lifetime of the Participant or
the Alternate Payee.

ERISA Defined Contribution Plan

This is a private tax-deferred savings plan set up by a company, union or
individual that will provide an income to a participant upon retirement.
Examples: Any Thrift Savings Plan, Profit Sharing Plan, or Employee Stock
Ownership Plan sponsored by a company, John Doe IRA Account #123456.

Pursuant to a QDRO, benefits may be paid in a lump sum payment to the Alternate Payee
immediately, when the Participant reaches his/her earliest retirement age or at
any other time as permitted by the plan.

Federal Government Plan

Government employees are members of either the Civil Service Retirement System (CSRS) or
the Federal Employees' Retirement System (FERS). Examples: employees of the
Postal Service, Federal Aviation Dept., civilian employees on military bases.

When a Court Order Acceptable for Processing is drafted, monthly benefits will
commence to the Alternate Payee when the Participant retires, and will continue
being paid for the lifetime of the Participant. If the Alternate Payee is
entitled to a Former Spouse Survivor Annuity, such monthly annuity shall
commence upon the Participant's death and continue for the life of the
Alternate Payee.

United State Military

The Military Retirement System provides benefits to members of the uniformed services.
Examples: Army, Air Force, Navy, Marines, Coast Guard, Reserves, National
Guard, Public Health Service, and the National Oceanic and Atmospheric
Administration).

When a Retired Pay Court Order is drafted, monthly benefits will commence to
the Alternate Payee when the Member retires, and will continue for the lifetime
of the Member. If the Alternate Payee is entitled to a Survivor Benefit Plan
Annuity (SBP), such monthly annuity shall commence upon the Member's death and
continue for the lifetime of the Alternate Payee.

State and Local Government and Public School Employee Plans

These plans apply to anyone who is employed by a state or local municipality
in any capacity or any public school teacher throughout the country.
Examples: Connecticut State Employees Retirement System, District of Columbia
Police Officers & Firefighters Retirement Plan, New Jersey Teachers Pension & Annuity Fund.

When a Domestic Relations Order is drafted, monthly benefits will commence to
the Alternate Payee when the Participant retires, and continue for the lifetime
of the Participant. Under some plans, the Alternate Payee may be designated as
the beneficiary of a survivor annuity under a specific benefit option which
must be specified in the order, otherwise, typically all payments to the
Alternate Payee cease upon the Participant's death.