Updated RS Plan Divorce Resources
On July 1, 2022, the cash balance benefit formula was added as an option within the Retirement Security (RS) Plan. The sample qualified domestic relations order (QDRO) templates and procedures have now been updated to reflect the new formula.
BAs and employees may now choose one of three sample RS Plan QDROs based on the type of benefit being assigned:
- Traditional only
- Cash balance only
- Both traditional and cash balance
If you have downloaded the prior sample RS Plan QDRO and procedures, please discard them and begin using the new documents immediately, even if your co-op has not adopted the cash balance benefit design.
Benefits administrators can find the new resources on the Divorce page in the BA Guide on the Employee Benefits website. Note that the 401(k) Pension Plan QDRO resources have not changed.
A QDRO is a court order used to assign all or a portion of an employee’s RS Plan benefit to an alternate payee, usually the employee’s former spouse. To assist with this process, NRECA provides sample QDROs and procedures. Employees may also work with an attorney when drafting a court order to ensure it satisfies applicable plan and legal requirements and meets their financial objectives. When a draft order is received, NRECA reviews it to determine if it meets the requirements for qualification.
The sample QDROs, where applicable, now include illustrations that show how NRECA calculates the traditional portion of an alternate payee’s assigned benefit. These examples depend on the payment authorization language and the award method specified in the court order. Accompanying procedures explain the requirements for an order to be qualified and the steps needed for evaluation and processing.
The BA Guide Divorce page also holds other helpful information and resources, including educational content and reminders relevant to divorce events. For example, as part of processing a divorce, BAs must obtain updated and physically signed beneficiary documentation from affected employees and must also update the ex-spouse’s address, if it has changed. If you have questions about the new sample QDRO packages or about any other aspect of processing a divorce, call the benefits compliance team at 866.673.2299, option 7. You can also send an email to qdro@nreca.coop.