Using a QDRO to protect your retirement

On Behalf of | Jun 7, 2022 | Divorce

When going through divorce an issue of concern for the non-working spouse or one who didn’t work as much or earn as much as the economically dominant spouse is whether the non-working spouse will receive a part of his/her spouse’s pension. Maybe you are in your 50s and your spouse has spent the last 20 years earning a pension. You anticipated living on the pension your spouse had accumulated but now you’re worried that getting divorced means you won’t be able to. This feeling of concern is very natural because finances will indeed change when you get divorced. However, this does not mean that you can’t retire. In Maryland, the law protects your interest in your spouse’s pension.

Becoming an alternate payee

Should it come to divorce, you (through your attorney) would ask the Court to award you a portion of the marital share, of your spouse’s pension.  The Court will use a pension order (a form) required/approved by the pension plan to accomplish the division of the marital share. The marital share is a fraction, the numerator of which is the number of months your spouse worked at the job while married to you and the denominator is the number of months your spouse worked at his/her job divided by 2. This form is a specialized order called a Qualified Domestic Relations Order (QDRO) and among other things establishes you as the alternate payee of your ex-spouse’s pension plan. When your spouse began the job, your spouse, as the employee, was the sole pensioner and unless there is a Court order, (QDRO) your spouse would receive 100% of the pension benefits.

When the Court grants you a QDRO, you will become an alternate payee, and the QDRO will contain, among other provisions, a provision identifying the percentage (or an amount) of the pension payment that you will receive.

Setting it up

If you want to use a QDRO, it is very important to set it up properly, so be sure you know exactly what legal steps to take to protect your interest in your spouse’s retirement benefits.