Updated 401(k) Plan Divorce Documents Now Available

Last year, the sample qualified domestic relations order (QDRO) templates and procedures for the Retirement Security (RS) Plan were updated to reflect the cash balance benefit formula. Now, the 401(k) Pension Plan sample templates and procedures have been reformatted to match those for the RS Plan. If you have downloaded the prior sample NRECA 401(k) Plan QDRO and NRECA 401(k) Plan QDRO procedures, please discard them and begin using the new documents immediately.

A QDRO is a court order used to assign all or a portion of an employee’s 401(k) 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 procedures explain the requirements for an order to be qualified and the steps needed for evaluation and processing.

The Divorce page in the BA Guide 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.