QDRO – IRA Rollover
FACTS
A former spouse, < 59.5, via a QDRO received 50% of 401(k) account from his former wife
QUESTIONS
When is he eligible to roll the QDRO account to an IRA?
Is he permitted to make partial distributions? In essence he is looking to keep the assets in the 401(k) and distribute them as needed to avoid the 10% penalty
I was under the impression a distribution (including a rollover) was available only when the participant was eligible for a distribution unless the plan made an exception allowing for a distribution due to a QDRO. The SPD was silent on the issue.
Guidance is appreciated.
Thank you
Permalink Submitted by Alan - IRA critic on Thu, 2015-02-26 16:29
You are correct. The plan provisions address what options are available to the alternate payee. A QDRO cannot force a plan to release distributions to an alternate payee that would not have been allowed to the participant. The divorce attorney should have looked into the plan provisions before drafting the QDRO assuming the need for liquidity for the client.