Portrait of John K Grubb

Texas Divorce and Prenuptial Agreement

4550 Post Oak Place, Suite 201 • Houston, Texas 77027-3139

Phone: 713-877-8800 • Fax: 713-877-1229

Pension Plans and Divorce

Spouses who divorce and who have substantial assets in pension plans will likely become familiar with a qualified domestic relations order (“QDRO”). QDROs are the sole means by which a spouse can receive a portion of the other spouse’s pension plan money. Otherwise, it is not possible to divert money from a person’s plan.

The QDRO must come from a state agency (usually it is the state court handling the couple’s divorce). It tells the administrator of the pension plan to forward some of the plan owner’s money to another payee. The QDRO can be a part of the divorce settlement, or it can come later, apart from the divorce settlement.

QDROs are only available for retirement plans that fall under the domain of the Employee Retirement Income Security Act (“ERISA”). ERISA covers pension plans, both defined benefit plans and defined contribution plans. Retirement plans that do not fall under ERISA and for which couples cannot use QDROs include state and federal retirement plans and Individual Retirement Accounts (“IRAs”). Spouses can usually transfer portions of an IRA as a part of a divorce to the other spouse without difficulty.

QDROs have to deal with child support, spousal support (also called alimony) or other property division. They can direct payment to a spouse, former spouse, child or someone else who is a dependent of the owner of the pension plan. The owner can use the QDRO to specify what percentage of the benefits should go to the recipient(s) and how long the payments should continue.

While QDROs are complex, they can be a useful tool for helping spouses negotiate a divorce settlement. Have you used a qualified domestic relations order for a divorce settlement? How would you describe the process for others considering one?

John K. Grubb & Associates, P.C. – Houston divorce attorneys

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