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Department of Labor Issues Final QDRO Regulations

2010-07-01

On June 10, 2010, the Department of Labor (DOL) published final regulations relating to the timing and priority of qualified domestic relations orders (QDROs).

These rules finalize the interim final regulations ("interim rules") that the DOL issued on March 7, 2007.

The final regulations clarify that the timing of the receipt of a domestic relations order after a certain event (e.g., death or divorce) or the sequence of when the plan administrator receives an order with respect to another order should not be the sole determining factors for denial of qualified status. However, a domestic relations order cannot require a plan to pay a benefit it would not otherwise pay under its terms, to change a benefit once payment has begun, or to otherwise violate one of the legal requirements set forth in the Employee Retirement Income Security Act (ERISA) or the Internal Revenue Code (the Code). Therefore, sometimes the timing of receipt of an order, or the sequence of receipt, along with other factors, may result in a valid denial. The final regulations provide some simple examples to assist plan administrators in understanding how to balance these various considerations.

The Hewitt bulletin linked to below summarizes the principles set out in the final regulations.

Department of Labor Issues Final QDRO Regulations