Author: Brian Hogan

Use the Right Letters to Divide Retirement Benefits

Use the Right Letters to Divide Retirement Benefits

Once you decide what retirement benefits are to be divided, you must choose the proper court order to effectuate the division.  The following is a brief discussion of several different kinds of orders used to divide the most common types of retirement plans.  A more detailed explanation of these orders can be found at or by speaking to one of our experts.

Private Employer Plans-Qualified

The most common plans that private employers offer their employees, such as traditional pensions or 401(k) plans, are “qualified” plans within the meaning of the Tax Code and the Employee Retirement Income Security Act of 1974 (ERISA).  These qualified plans must be divided using the order that most people are familiar with—the Qualified Domestic Relations Order (QDRO).

Private Employer Plans-Nonqualified

Some private employers offer plans that are not qualified under the Tax Code/ERISA (e.g., top-hat plans).  These types of plans are referred to as “nonqualified” plans.  Some of these plans are divisible through a Domestic Relation Order (DRO).  As the name suggests, these orders are similar to QDROs.  However, they are not called “qualified” orders because they do not apply to qualified plans.

Some nonqualified plans are not divisible.  Instead, the participant may have to pay the alternate payee directly or the value of the plan should be offset from other marital assets.

State Plans

Plans offered by state governments for their employees are also not considered qualified under Tax Code/ERISA.  Some states require their own division orders to divide said plans (e.g., Ohio requires the use of a Division of Property Order (DOPO); Michigan, in some circumstances, requires the use of an Eligible Domestic Relations Order (EDRO)).  Other states, such as Indiana, do not allow for state employee benefits to be divided through an order. 

Federal Government Plans

Benefits in the Federal Employee Retirement System (FERS), the traditional pension offered to many federal employees; the Civil Service Retirement System (CSRS), which has been frozen to new participants for decades; or the Thrift Savings Plan (TSP), which is a defined contribution plan offered to federal employees, are divided through a Court Order Acceptable for Processing (COAP).

Benefits in the Foreign Service Pension System, which is for certain State Department employees, are automatically divided via statute—if the length of marriage/service in the plan meet the statutory requirements.  However, if the parties want to depart from the statutory division, the benefits may be divided through a spousal agreement that has been verified by a court or through a separate court order.

Military Pension Plans

Provided the marriage has met the 10/10 rule, the parties were married for at least 10 years and the service member has at least 10 years of satisfactory service during the marriage, a military pension plan can be divided through a Military Retired Pay Division Order (MRPDO).  If the parties do not meet the 10/10 rule, then payments must be established directly from the parties.


Don’t worry if you feel lost with all of the acronyms, let alone how to draft the orders.  We have been in business for over 30 years helping attorneys to understand retirement benefits and to divide them.  Please feel free to give us a call and we would be happy to discuss your case with you.

Ohio Supreme Court Rules on Modifying Divorce Decree

Ohio Supreme Court Rules on Modifying Divorce Decree

Walsh v. Walsh, Slip Opinion No. 2019-Ohio-3723 (Sept. 18, 2019) overturning 11th Dist. 2018-Ohio-2466

Issue: Does changing the term of the marriage in the final decree of divorce without the consent of both parties violate Ohio Revised Code § 3105.171 (I), which prohibits modifying such orders “except upon the express written consent or agreement to the modification by both spouses.”

Decision:  According to the Ohio Supreme Court: Yes. In so deciding, the Court overturned the Eleventh District Court of Appeals which had seen the trial court’s action in lengthening the marriage from six years to ten years as being within the court’s power to “clarify and construe its original property division so as to effectuate its judgment.” ¶14. The trial court did this upon the motion of a service member’s former spouse to change the length of the marriage to ten years so that direct payments could be made from the Defense Finance Accounting Service (DFAS) to the former spouse.

There was a strong dissent in the Eleventh District by Judge Diane Grendell who explained, “That it would be more convenient for the appellee to receive her portion of appellant’s military pension directly from the Secretary is not in dispute, but neither is it relevant nor does it justify the blatant manipulation of the factual record.” ¶19. She also expressed concern that “As often happens, deception begets further complications.” ¶ 22. Worrying that the share of the pension being awarded might increase because of the change despite the testimony of a QDRO Group (then QDRO Consultants) expert that it would not.

Clearly, the Ohio Supreme Court agreed that changing the length of the marriage was an impermissible modification because both parties did not consent to the change.

Discussion:  This case points out the necessity of getting the separation agreement that is incorporated into the judgment entry right the first time. In some ways, the entire case was inexplicable. It was clear that the service member owed his former wife 15% of his retired pay even if DFAS did not make direct payments—meaning he will be responsible to make those payments directly to his former spouse.

To see how much more complicated the underlying issues are, see Reynolds v. Turull, 2019-Ohio-4600 where the Ohio Supreme Court did not accept an appeal for review with two justices dissenting and one wanting to summarily reverse the judgment of the court of appeals.  We will likely write a far lengthier article on what are modifications versus efforts to merely enforce the judgment entry for the Domestic Relations Journal of Ohio in the near future.

How we can help: When we are involved early in the divorce process (i.e., before the separation agreement/judgment entry is final), we can provide guidance to attorneys on how the benefit in question can be divided.  In this case, we could have informed the attorney of the 10/10 rule for dividing military pensions (the parties must be married for at least 10 years overall and have been married for at least 10 satisfactory years of military service), to receive payments directly from DFAS.

Complete the QDRO ASAP

Complete the QDRO ASAP

We always suggest that the applicable division order for a retirement asset—whether it be a qualified domestic relations order (QDRO), a division of property order (DOPO), court order acceptable for processing (COAP), etc.—be completed and filed with the plan as soon as possible.  In fact, if the parties have agreed to the terms of division, we suggest having the division order drafted prior to the final hearing so the court can execute the division order at the same time as finalizing the divorce/dissolution.  We suggest this because life is unpredictable and there can be adverse consequences if there is a delay in completing the division order and filing it with the plan. 

This post will outline just a few of the issues that can occur if there is a delay in filing a division order.  For the sake of brevity, we will only discuss the issues that arise when there is a delay in filing a QDRO with a qualified, defined contribution (DC) plan.  But be aware, a delay in filing a division order can cause problems with any retirement asset.


One of the parties can die unexpectedly and complicate the division process.  The Department of Labor provided guidance that the timing of a QDRO should not matter (i.e., if a QDRO is filed after death it should still be acceptable).  See Department of Labor, QDROs The Division of Retirement Benefits Through Qualified Domestic Relations Orders (available at:  However, there are a number of DC plans that ignore this guidance and will not process a QDRO after either the participant or alternate payee has died.

There are some plans that will process a QDRO after the participant dies but will not do so if the alternate payee dies.  These plans take the position that the estate of a former spouse does not fit the definition of an alternate payee under the Employee Retirement Income Security Act of 1974 (ERISA).  See Section 206 of ERISA (29 U.S.C. 1056) (which defines an “alternate payee” for the purposes of a QDRO as a “spouse, former spouse, child, or other dependent of a participant”). 

Further, even if the plan would accept a QDRO after the death of the participant, the assets may be paid out if there is a delay.  For example, if the plan has no notice that funds are owed to former spouse, the plan will just pay out the assets to the participant’s death beneficiary, who may not be the former spouse.  This could lead to a probate battle.

Account Withdraw/Distribution/Loans

If there is a delay in filing a QDRO and there are no other freezes placed on the DC account, the participant is free to do with the account as he/she pleases—subject, of course, to the terms of the plan.  The participant could remove all of the funds and roll them into an individual retirement account.  If the participant is the correct age, he/she may take a distribution of the assets.  The participant could take a loan against the assets that will encumber the portion intended for the alternate payee.  Under these scenarios any collection of the amount owed to alternate payee would have to come from the participant directly—not the plan.

Missing Records

DC plans frequently change record keepers—the entity that keeps the records of plan assets and individual account balances.  When the plan changes record keepers, generally, the new record keeper will not have any records held by the previous record keeper (i.e., the plan cannot calculate the balance of a participant’s account for any period prior to when the new record keeper was engaged).  This means if one waits to complete a division order, the plan may not be able to calculate the participant’s balance as of the date of divorce. 

We understand that sometimes delays in filing the division order are unavoidable.  However, if at all possible, file the division order shortly after the divorce or the case could become more complicated.

How we can help: Our experts are here to discuss your case and help you to determine the best practices.  With our five to seven business day turnaround time (once we have all of the information we need), we can help you complete the division orders in a timely manner.  Further, if any of the unfortunate situations set forth above, or some other complication occur, we can help lead in you in the right direction to receive the assets your client is owed.

Did you know?

We recently added a tagline to our logo that describes who we are and what we strive for.


We have a caring staff that is eager to help. Whether we are answering initial questions or explaining complex provisions, you will find our team is patient and dedicated to providing the solutions you need to best represent your client


Nobody likes listening to automated phone options, or waiting for someone to come back from lunch – especially when you are in court and need an answer! We are available when you need us. We coordinate staff schedules so that someone is always ready to take your call and we freely provide our direct dial phone numbers.


In the field since 1985 and authors of leading texts, our staff of fourteen has unrivaled depth of expertise. Our actuarial and legal experts can handle any issue whether common or complex. From discovery to final approval, we walk with you through the entire process and take pride in helping you secure a family’s best possible future following divorce.

Defined Benefit vs Defined Contribution Plans

Defined Benefit vs Defined Contribution Plans

Kapp v. Kapp, 2d Dist. Clark No. 2018-CA-133, 2019-Ohio-133 (October 4, 2019).

Issue: Did the trial court err by dividing the defined contribution plan at issue using a coverture fraction and ruling the alternate payee could not collect her share until participant retires?

Decision:  In this case, the Second District Court of Appeals determined the trial court did err in its division of the Husband’s 401(k), a defined contribution plan.  Prior to the hearing before the trial court, the parties stipulated that the marital portion of the 401(k) plan was $11,849.75.  However, the trial court mistakenly believed this amount was the value of the entire account.  The trial court ordered the $11,849.75 to be divided using a coverture fraction (with the numerator being the Husband’s number of months of service in the plan during the marriage and the denominator being the Husband’s total months of service in the plan at retirement).  The trial court further ordered that the plan assets were not to be divided until Husband either retired or otherwise started payment from the plan.

As the Second District Court of Appeals noted, this type of division using a coverture fraction and waiting until the time of retirement to value the benefits is common in defined benefit plans—not defined contributions plans.  This type of division is not appropriate for a defined contribution plan, which has an easily determined value and the value of the marital portion will only increase after divorce due to market forces (whereas the marital portion of a defined benefit plan will increase with a higher average wage earned in subsequent years of service).  Accordingly, the Second District held the trial court abused its discretion in its division of the 401(k).  It continued by stating the reasonable division in this matter was to immediately divide the $11,849.75 in half and award Wife gains/losses on her share from the date of assignment until her amount was segregated.  

Discussion:  It is important to remember that dividing retirement plans at divorce can be complicated.  It should not be taken for granted that anyone in the room understands the plan(s) at issue during a divorce.  As such, you, as the attorney in the case, must know the plan(s) at issue and be able to explain them to everyone involved, even the court.

How we can help:  We have decades of experience in this area.  We can help you to understand the plan(s), make exhibits for trial, and/or offer expert testimony at the hearing.  Please feel free to give us a call.  We pride ourselves on having friendly, available experts that are ready to help you protect your client’s interests with respect to the retirement benefits.

QDRO Group on the Road

On October 24th and 25th we sponsored ICLEF’s 17th Annual Family Law Institute in Indianapolis. The above picture shows staff attorney James Myers who is licensed in both Ohio and Indiana and is a frequent contributor to this blog.

In addition to sponsoring events like this, we also speak frequently at CLE seminars. Let us know if you like to see us at an upcoming event near you.

Plan Loans/Withdrawals Taken During the Marriage

Plan Loans/Withdrawals Taken During the Marriage

Daugherty v. Daugherty, Butler County Court of Common Pleas No. DR18 06 0563 (August 30, 2019).

Issue:  When a defined contribution plan contains both separate and marital property, are loans/withdrawals during the marriage considered separate or marital in nature?

Decision:  In this case, the Butler County Court of Common Pleas, Domestic Relations Division, found that the loans/withdrawals taken out of the defined contribution (DC) plan were marital in nature.  The Husband and Wife were married 1999.  At the time of marriage, the Husband had funds in his Federal Thrift Savings Plan (TSP) that were his separate property.  During the marriage, Husband continued to contribute to the account but also took multiple loans and withdrawals—some of which were not repaid by the date of divorce in 2019.  During the trial, Husband offered unrebutted testimony that all of the loans/withdrawals were spent on marital debt.

One of the issues at trial was whether the loans/withdrawals should be considered marital in nature—thereby excluded from the calculation of the marital portion.  Or if the loans/withdrawals, or any portion thereof, should be considered separate property and imputed against Husband’s portion of the benefits.  Wife hired an expert who testified that all the loans/withdrawals taken against the TSP during the marriage should be allocated using a proportional method.  The expert claimed that the assets in the TSP account were 40 percent marital and 60 percent separate property.  He then proposed that all the loans/withdrawals, regardless of how the money was spent, should be considered 40 percent marital and 60 percent separate in nature.

The Wife’s attorney hired QDRO Group for expert testimony.  Dave Kelley and Jim Coco testified that, since the loans/withdrawals were taken during the marriage and Husband testified that they were used to pay marital debts, 100% of the loans/withdrawals should be considered marital in nature.  Dave and Jim explained that it is our company’s position, which is held by many others in the field, that loans/withdrawals taken from a retirement account during the course of the marriage should be assumed to have been spent on marital debts/assets and are therefore marital in nature.  This assumption can only be overcome by demonstrating that the funds from the loans/withdrawals were spent on something that is separate in nature. 

After considering the expert testimony and Husband’s unrebutted testimony, the trial court found the loans/withdrawals from the TSP account were marital in nature.  As such, the loans/withdrawals should be excluded from the calculation of the marital portion of the TSP account.

Observation:  In a divorce, it is important to discover if any loans/withdrawals were taken from a retirement plan, when the loans/withdrawals were taken, and what the funds were spent on.  This discovery can make a difference whether the loans/withdrawals are considered marital or separate in nature, which will affect the amount your client ultimately receives.

How we can help:  We produce reports that trace the growth on the separate property component of defined contribution plans and can also help you choose how to treat plan loans/withdrawals in a way that will stand up in court.  Call us anytime to discuss the specifics of your case.