What are QDRO Determination Letters?
Some retirement plans will send divorcing parties “determination letters” following the receipt of a court-entered order that the plan finds acceptable — a valid QDRO. A determination letter is simply a statement of the plan’s interpretation of the QDRO. A determination letter on a 401(k) QDRO, for example, might show the percent or dollars assigned to the alternate payee and whether loans were included or excluded. On a pension, a determination letter would likely discuss the extent of survivor benefits.
Plan Policies
Plans differ in their administrative policies but a common policy is to issue a “Preliminary Determination” that is subject to the parties disputing any mistakes for 30 days. If no valid dispute arises, the Preliminary Determination becomes a “Final Determination” and the QDRO is implemented. Generally, divorcing parties have the option of waiving the 30 day period if they have no dispute with the Preliminary Determination.
What should you do with a determination letter?
You should have your attorney review the determination letter to make sure it comports with the QDRO. Mistakes should be corrected within the period allowed by the plan.
QDRO Professionals’ Policy on Determination Letters
We’ll review the letter and report back to you and the plan if there are any problems with the plan’s determinations. This service is included in our flat fees for QDRO preparation. If it is not clear whether we were copied on a determination letter, send us a copy.
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