QDRO Corner: Oh, what’s in a name?
In order for a QDRO to be accepted by the plan, it must refer to the plan by its proper name. It’s a simple rule but is easily violated. Plan names may appear on the regular account statement, in an online portal account, in the employee handbook/benefits statement, and in correspondence between the employer/plan and the employee. However, some of these sources may refer to a plan by an old name, or a shortened version of the name. In addition, some plans may be known generally by the name of the umbrella plan, but there are subplans and the specific subplan name must be included in the QDRO.
One large plan in the Maryland/DC area that is quite particular about this is the Maryland State Retirement and Pension System. This is the plan in which public school teachers in Maryland participate. Based on when the teacher started working for the state and a few other criteria, the teacher could be a participant in the Teachers’ Retirement System or the Teachers’ Pension System. Getting this one-word difference wrong will result in the State rejecting the order.
The best way to avoid this simple error is to obtain a statement of the plan and compare the name listed there to the plan name listed in the Summary Plan Document (which can be obtained by calling the plan and asking for it). When drafting agreements or seeking a share of a retirement benefit in court, be sure to use the correct plan name for the best specificity. This will delay any ambiguity for the QDRO drafter.
