Form 25-5

Caveat: No form or model QDRO should be used as a substitute for the knowledge necessary to divide a retirement benefit. Each plan has different requirements, so this form must be modified depending on the plan. Be very careful in drafting a qualified domestic relations order. It is advisable to get the help of an expert to prepare the order and to prequalify the qualified domestic relations order with the plan administrator before the order is signed by the judge. Approval by the plan does not mean that the QDRO was prepared in accordance with the decree or the negotiated division, but only that it meets the requirements for a QDRO under ERISA.

This form is designed to be used only for the preparation of an order dividing a defined contribution private retirement plan that is a qualified plan under ERISA. It is recommended that this order be signed at the same time as the decree to avoid complications and additional costs for the client.

A QDRO may be used for the division of marital property, child support, spousal maintenance, or ali­mony. This model QDRO should be adjusted accordingly, depending on the purpose of the QDRO.

NOTICE: THIS DOCUMENT
CONTAINS SENSITIVE DATA

[Caption. See § 3 of the Introduction in volume 1 of this manual.]

Qualified Domestic Relations Order

[Private Retirement Plan—Defined Contribution]

IT IS HEREBY ORDERED:

1.Designation as QDRO
29 USC § 1056(d)

Effect of the Order as a Qualified Domestic Relations Order

This order shall be incorporated into and shall become an integral part of the [name of order] signed in this case as if recited verbatim in the decree. This order creates and recognizes the existence of an alternate payee’s right to receive a portion of the participant’s benefits payable under an employer-
sponsored defined contribution plan that is qualified under section 401 of the Internal Revenue Code (the Code) and the Employee Retirement Income Secu­rity Act of 1974, as amended (ERISA). This order is intended to constitute a qualified domestic relations order (QDRO) under section 414(p) of the Code and section 206(d) of ERISA.

This order is entered pursuant to the authority granted in the applicable domestic relations laws of Texas concerning [marital property rights/child sup­port/alimony/[specify]].

2.Plan Information

The Plan

The name of the plan to which this order applies is the [formal name of plan] (the “Plan”). Further, any successor plan to the Plan or any other plan(s) to which liability for provision of Participant’s benefits described below is incurred shall also be subject to the terms of this order. Any benefits accrued by Participant under a predecessor plan of the employer or any other defined contribution plan sponsored by Participant’s employer, where liability for ben­efits accrued under such predecessor plan or other defined contribution plan has been transferred to the Plan, shall also be subject to the terms of this order. Any changes in the plan administrator, plan sponsor, or name of the Plan shall not affect Alternate Payee’s rights as stipulated under this order.

3.Participant Information

Participant Information

Following is the identification and contact information of the participant (“Participant”):

Name:

Social Security number: See Addendum

Birth date: See Addendum

Address:

4.Alternate Payee Information

Alternate Payee Information

Following is the identification and contact information of the alternate payee (“Alternate Payee”):

Name:

Social Security number: See Addendum

Birth date: See Addendum

Address:

Alternate Payee is the [spouse/former spouse/child/dependent] of Participant.

Participant and Alternate Payee shall each have the duty to notify the plan administrator in writing of any changes in their mailing address subse­quent to the entry of this order.

5.Division of Benefits

Division of Benefits

5.A.Percentage

This order awards, assigns, and grants to Alternate Payee an amount equal to [percent] percent of Participant’s total vested account balance, as of [date of division] (or the closest valuation date thereto), [including/excluding] interest, earnings, investment income, gains, and losses attributable thereon from [date of division] until the date of segregation. If Alternate Payee does not elect an immediate distribution, Alternate Payee’s share of the benefits described above shall be segregated and separately maintained in account(s) established on Alternate Payee’s behalf and shall additionally be credited with any interest, earnings, investment income, gains, or losses attributable thereon from the date of segregation until the date of total distribution to Alternate Payee.

If Participant’s account balance in the Plan includes an outstanding loan balance, the amount of the outstanding loan balance [will/will not] be included in Participant’s total vested account balance for purposes of determining Alter­nate Payee’s interest.

Alternate Payee’s share of the benefit shall be allocated on a pro rata basis from all accounts and subaccounts established on behalf of Participant, with the exception of any outstanding loan balance or employer securities that can be held only by employees, if any.

5.B.Dollar Amount

This order awards, assigns, and grants to Alternate Payee [number] dol­lars ($[amount]) of Participant’s total vested account as of [date of division] (or the closest valuation date thereto) [including/excluding] any interest, earnings, investment income, gains, and losses attributable thereon from [date of divi­sion] until the date of segregation. If Alternate Payee does not elect an immedi­ate distribution, Alternate Payee’s share of the benefits described above shall be segregated and separately maintained in account(s) established on Alternate Payee’s behalf and shall additionally be credited with any interest, earnings, investment income, gains, or losses attributable thereon from the date of segre­gation until the date of total distribution to Alternate Payee.

Alternate Payee’s share of the benefit shall be allocated on a pro rata basis from all accounts and subaccounts established on behalf of Participant, with the exception of any outstanding loan balance or employer securities that can be held only by employees, if any.

If Participant’s total vested account balance on the date of segregation is less than the amount herein assigned to Alternate Payee, Alternate Payee shall receive the entire vested account balance.

6.Commencement Date and Form of Benefit

Commencement Date and Form of Benefit

If Alternate Payee so elects, Alternate Payee shall be paid Alternate Payee’s benefits as soon as administratively feasible following the date this order is approved as a qualified domestic relations order by the plan adminis­trator or, at the earliest date permitted under the terms of the Plan, if later. Alternate Payee may elect to receive Alternate Payee’s benefits in any one of the allowable benefit distribution options permitted under the terms and provi­sions of the Plan, including but not limited to a single lump-sum cash payment.

7.Alternate Payee’s Rights and Privileges

Alternate Payee’s Rights and Privileges

On and after the date that this order is deemed to be a qualified domestic relations order, but before Alternate Payee receives Alternate Payee’s total dis­tribution under the Plan, Alternate Payee shall be entitled to all the rights and election privileges that are afforded to active participants and beneficiaries, including but not limited to the rules regarding the right to designate a benefi­ciary for death benefit purposes, and the right to direct Plan investments, only to the extent permitted under the provisions of the Plan.

8.Death of Alternate Payee

Death of Alternate Payee

If Alternate Payee dies before receiving the full amount of benefits assigned to Alternate Payee in this order, Alternate Payee’s beneficiary(ies) as designated on the appropriate form provided by the Plan (or, in the absence of a beneficiary designation, according to the rules of the Plan) shall receive the remainder of Alternate Payee’s unpaid benefits.

9.Death of Participant

Death of Participant

If Participant dies before the establishment of separate account(s) in the name of Alternate Payee, Alternate Payee shall be treated as the surviving spouse of Participant to the extent of the full amount of Alternate Payee’s ben­efits under this order. If Participant dies after the new account(s) have been established on Alternate Payee’s behalf, Participant’s death shall not affect Alternate Payee’s right to receive Alternate Payee’s assigned portion of the benefits.

10.Participant Constructive Trustee

Participant Constructive Trustee

If the Plan pays to Participant any benefits that are assigned to Alternate Payee pursuant to the terms of this order, Participant is designated a construc­tive trustee to the extent that Participant has received such benefit payments and shall immediately return, within three days of receipt by Participant, the amounts so received to the Plan.

11.Savings Clause

Savings Clause

This order is not intended and shall not be construed in such a manner as to require the Plan to—

1.provide any type or form of benefit or any option not otherwise provided under the Plan,

2.provide increased benefits (determined on the basis of actuarial value), or

3.require the payment of any benefits to Alternate Payee that are required to be paid to another alternate payee under another order that was pre­viously determined to be a qualified domestic relations order.

12.Tax Treatment

Tax Treatment of Distribution

For purposes of sections 402(a) and 72 of the Internal Revenue Code, any Alternate Payee who is the spouse or former spouse of Participant shall be treated as the distributee of any distribution or payments made to Alternate Payee under the terms of this order and, as such, will be required to pay the appropriate federal income taxes on such distribution. Alternate Payee or Alternate Payee’s beneficiary(ies) shall report any benefit payments on any applicable income tax return(s).

13.Continued Jurisdiction

Continued Qualified Status of Order and Continued Jurisdiction

It is the intention of the parties that this qualified domestic relations order continue to qualify as a qualified domestic relations order. The Court shall retain continuing jurisdiction over the parties and property to the extent necessary to render an amended or corrected domestic relations order for the payment of benefits to Alternate Payee.

14.Separate Property

Separate Property

The benefits payable to Alternate Payee pursuant to this order shall be the separate property of Alternate Payee, and Participant is hereby divested of all right, title, and interest in that property. The Plan benefits not assigned to Alternate Payee pursuant to this order shall be the separate property of Partici­pant, and Alternate Payee is hereby divested of all right, title, and interest in that property.

15.Cost of QDRO Determination

Cost of QDRO Determination

If all or a portion of the costs attendant to the determination of whether this order qualifies as a qualified domestic relations order is to be charged, [percent] percent of those costs shall be charged to Participant’s account, and [percent] percent of those costs shall be charged to Alternate Payee’s account.

16.Conflict

Conflict

In the case of a conflict between the terms of this qualified domestic relations order and the terms of the Plan, the terms of the Plan will prevail.

SIGNED on ___________________________________.

   
JUDGE PRESIDING