Gray Jay Endeavors LLC

QDRO stands for Qualified Domestic Relations Order, this is a legal order that allows for the division of retirement plan benefits such as 401(k) or pensions without having to pay any withdrawal penalties or tax consequences at the time of the division.

A guideline that helps us ensure we are including the proper content for your specific plan while we draft the QDRO. They will include the official name of the plan, identify the plan administrator and their contact information, and will often also include a sample QDRO.

Once your QDRO has been approved by the court it still must be sent to the plan administrator for implementation and that process can take a few weeks or months. The court will send you (or your lawyer) a copy with a court stamp on it.  They will not mail it directly to us.  The QDRO must be sent back to us via postal mail or in person. This copy must have a court stamp on it, an electronic scan will not be accepted by most plan administrators.

When we receive it, we will then file it with the plan administer for implementation. We do not have access to distribute your money; the plan admin will be the one to contact you about your funds. Once we have submitted that court stamped document, our service is completed unless you have further questions.

Plan admins will typically reach out to you once they receive the approved QDRO from the court, with a summary of their review and instructions on how to access your funds. This may take 2-8 weeks depending on the plan administrator. 

For example, Fidelity usually processes QDROs within about 2 weeks of receipt and once approved they will separate the funds into a separate account about 7 days later.  They will then send you a letter indicating they separated the funds and asking you what you want to do with the funds and providing you with a form to give the directions. You can choose to roll them over into another retirement account or distribute the funds as cash (which will incur income taxes), and in some cases you may be able to keep them in the existing account. 

When your QDRO is approved by the court, its returned back to you with a court stamp/seal on it. To implement the QDRO, we must send that stamped copy to the plan administrator. Mail your copy to Gray Jay Endeavors, LLC, 9 Main St. Southborough, MA 01772.

In order for us to draft the QDRO we must have your social security and date of birth; we provide a link in which you can safely upload it. Not tech savvy? We can follow up with a phone call to retrieve said information.

After you’ve completed the Intake Form, we will e-mail you and layout a timeline on how long and what steps need to be taken for each specific case we handle as not all cases are the same. Most e-mails we send you will include a direction or information that we need and a section titled “Next Steps” that outlines the remaining steps to complete your QDRO implementation.

QDROs are required for ERISA “qualified” plans, this includes retirement plans such as private company pensions, and 401ks or similar accounts from private sector employers and unions. ERISA generally does not cover government plans, church plans or plans for workers’ compensation, unemployment or disability.

The Q in QDRO is Qualified, so if the plan is covered under ERISA it will require a QDRO to divide. If the retirement plan is not covered by ERISA, such as IRAs or government pensions, it’s not a “qualified” plan but it still might require an order to divide.  That type of order is just considered a domestic relations order (DRO).

No, typically an IRA does not need a QDRO, although you do need to include specific information about the IRA division in your divorce decree or separation agreement, and you must follow specific IRS rules to avoid taxes and penalties when dividing the plan. If the divorce decree or separation agreement is not specific enough the plan administrator may require a domestic relations order (DRO) to divide the IRA. The procedures for preparing and implementing a DRO are similar to a QDRO.

Yes, but it only requires a QDRO if it’s covered under ERISA, i.e. an employer sponsored plan. Government pensions, such as a Massachusetts State Employees’ Retirement Plan pension, can still be divided and usually requires a domestic relations order (DRO) instead of a QDRO.  The procedures for preparing and implementing a DRO are similar to a QDRO.

Yes, even after someone has retired and starts receiving a pension a QDRO (or DRO depending on the type of plan) can be used to divide the ongoing payment.

Yes, in most cases for each account a QDRO is necessary because each plan has its own rules and requirements. Each retirement plan is considered its own legal entity. For example, if spouse A has a 401(k) with Fidelity, a pension with an employer, and a second 401(k) from a previous job at Vanguard. You’ll need one QDRO for the Fidelity account, another for the Vanguard account and another one for the pension.

There are two circumstances in which you can avoid multiple QDROs:

• • First, in some rare cases the plans are with the same entity (like multiple teacher’s retirement accounts all held at TIAA-CREF). In this instance it may be possible to do one QDRO that names multiple plans because they all have the same plan administrator.
  • Second, in many cases clients agree that they will calculate an offset transfer amount to minimize the number of QDROs. The advantage to an offset transfer is that it requires less paperwork and less QDRO fees. The downside of an offset transfer is that once the transfer is calculated any market changes can only be applied to that one account going forward.  The market changes on the other accounts, which are not being divided, will not be taken into account after the date of the offset calculation.

There are a lot of different factors that go into the process and it’s in the hands of all parties, including the plan administrator. In each case we try our best to give an estimated timeline on how long each step in the process may take.  Here are the steps that must be completed:

• Once we receive payment for our services and all of the necessary information, we will provide a draft QDRO typically with 14 days.
• When the draft is reviewed and approved by the parties, it will be submitted for preapproval with the plan administrator (i.e. Fidelity) this can take 2-6 weeks (though in some circumstances it may take many months). When pre-approved it will then need to be submitted to the court, along with a Joint Motion, either prepared by us at Gray Jay or your counsel.
• The QDRO and Motion can be e-filed in Massachusetts courts and are usually ruled on administratively and mailed back within 4-6 weeks of filing with the court.
• Once received back from the court signed, stamped and approved, you must provide the stamped copy to us, and we will file it with the plan administrator for implementation, which usually then takes another few weeks. At this point our timeline is completed, any further correspondence received or sent should be directly with the plan administrator.