Qualified Domestic Relations Order Guide

Follow this guide to learn the steps involved with notifying and receiving the benefits awarded in a Qualified Domestic Relations Order (QDRO).

1. Obtain the QDRO

Ensure that the court has issued a Qualified Domestic Relations Order (QDRO), which grants you the right as an alternate payee to receive benefits from your ex-spouse’s (or other related party’s) 401(k) plan.

The QDRO should clearly outline:

• Your status as the alternate payee.

• The specific amount or percentage of the 401(k) benefits you are entitled to receive.

• The timeline or conditions under which these benefits will be distributed.
  

2. Contact NestEggs

• Notify NestEggs that a QDRO has been issued by using our notification form found here - QDRO Notification Form

3. Submit the QDRO for Approval

• Provide the plan administrator with a copy of the QDRO. Each plan has specific procedures for reviewing and approving QDROs, so ensure the document meets all plan requirements.

• NestEggs will review the QDRO to determine if it qualifies under ERISA (Employee Retirement Income Security Act) and the plan’s rules.
  

4. Wait for QDRO Determination

• The plan administrator will notify you (and the participant) whether the QDRO is accepted as qualified.

• If the QDRO is not qualified, the administrator will provide details on what needs to be corrected. Work with an attorney to modify the QDRO and resubmit it.

• If the QDRO is qualified, you will receive written confirmation.

5. Coordinate with the Plan Administrator on Payment

• Once the QDRO is approved, the proceeds will be placed into a separate account for you as the alternate payee. You will have online access to manage the investment allocation as you consider your distribution options.

  The following distribution options are available to you as an alternate payee.
  
  Options include:

• A lump sum distribution.

• A rollover to another qualified retirement account, such as an IRA, to avoid tax penalties.

• Periodic distributions or installments, depending on the plan terms.

6. Complete Distribution Forms

• NestEggs will provide you with the necessary forms to complete for the distribution or rollover.

• Fill out the forms and specify how you wish to receive the benefit (e.g., direct payment, rollover, etc.).

7. Submit Tax Withholding Information

• If you are receiving a lump sum distribution, tax withholdings might apply.

• Consult with a tax professional to understand the tax implications of the distribution.
  

8. Monitor Distribution Timing

• Once all forms are completed and submitted in good order and are approved, NestEggs will begin processing the payment.

• Payment processing typically takes 2-3 business days after your form is determined to be in good order and approved for processing.

  You will remain invested in your current positions during processing and are subject to market fluctuations. If you're concerned about potential losses, you can trade in your online NestEggs account to shift to a less volatile asset allocation.

9. Retain Documentation

• Keep copies of the QDRO, the confirmation from NestEggs, and any correspondence related to your benefit. This will be important for record-keeping and in case of future inquiries.

If you encounter any issues or have questions about the process, it may be helpful to consult with a legal or financial professional for guidance.