QDRO distributions…
We have a client that was awarded a portion of her ex-husbands retirement account through a QDRO….the ex-wife is under the age of 59 1/2 and is looking to take distributions…she was advised that these distributions would be penalty free, we believe the distributions would have penalties. Can you please confirm what is correct.
Thanks!
Permalink Submitted by Alan Spross on Tue, 2011-03-29 17:34
The penalty does not apply to distributions made directly to the alternate payee under a QDRO per Sec 72(t)(2)(C).
Note that this exception does not apply to IRA accounts, so rollovers before age 59.5 should be carefully considered. A QDRO also does not require a plan to provide distributions not otherwise allowed by the plan and distribution options should be checked with the plan administrator.