QDRO Corner: Fees Related to QDRO Preparation and Implementation

In the general process of having a QDRO prepared and implemented, there are more fees than just the fee to have the Order drafted by the attorney. These fees can add up to a substantial amount of money, and therefore it is important to address them at least generally in an agreement.

In total, the fees can include:

1.    Drafting Attorney’s Fee

2.    If the drafting attorney represents only one party, then the other party will likely incur fees to have an attorney review the QDRO on his/her behalf

3.    Court fees to obtain the certified copies

4.    Postage to mail or otherwise deliver the certified copies to the Plan

5.    Review fee charged by the Plan

What is the review fee charged by the Plan? Plans of course have their own attorneys or other trained staff review submitted QDROs to ensure that if implemented, the Plan remains within compliance with ERISA or other laws regulating their plan, and within the rules of their plan. The Plan is allowed to pass these fees on to plan participants if the fee is published so that the participant has notice of such fee in advance. Note, the amount of the fee is not required to be published, only the fact that there is a fee and that it may be passed on to the participant.

Fees typically range from approximately $300 - $2,400 per order and are determined by the Plan. The fee is not paid out-of-pocket by the participant, but rather the fee is taken from the participant’s account during the transfer or review process.

Many plans will allow for this review fee to be transferred entirely to the alternate payee, or to be shared between the parties. If this fee is not addressed in the QDRO, plans typically will default to charging it to the participant, or rejecting the order for vagueness. It is best to contact the plan while still negotiating the agreement so that this fee can be addressed as a part of the larger agreement.