Introduction
Dividing retirement benefits during a divorce can be complicated, especially when it comes to employer-sponsored 401(k) plans like the Johnson Controls Retirement Savings and Investment Plan. At PeacockQDROs, we’ve helped countless clients understand how to divide these accounts using a Qualified Domestic Relations Order (QDRO). As a 401(k) plan sponsored by Johnson Controls, Inc., this retirement plan has unique features that both the employee and the non-employee spouse should understand before finalizing the divorce settlement.
In this article, we’ll walk you through how QDROs apply to the Johnson Controls Retirement Savings and Investment Plan, cover critical plan-specific considerations, and offer insights that can help avoid common (and costly) mistakes.
What Is a QDRO and Why Do You Need One?
A QDRO is a court order that allows retirement benefits to be legally divided between divorcing spouses. Without a QDRO, the plan administrator cannot pay benefits to anyone other than the employee participant—even if your divorce judgment says otherwise.
For 401(k) plans like the Johnson Controls Retirement Savings and Investment Plan, a QDRO lets a former spouse (called the “alternate payee”) receive a portion of the account without triggering penalties or taxes for the participant. This makes the QDRO a critical tool for protecting retirement assets in divorce.
Plan-Specific Details for the Johnson Controls Retirement Savings and Investment Plan
- Plan Name: Johnson Controls Retirement Savings and Investment Plan
- Sponsor: Johnson Controls, Inc.
- Organization Type: Corporation
- Industry: General Business
- Address: 5757 N Green Bay Avenue
- Plan Number: Unknown
- EIN: Unknown
- Status: Active
- Plan Type: 401(k) Plan
- Participants: Unknown
- Plan Year: Unknown to Unknown
- Effective Date: Unknown
- Assets: Unknown
Because this is a 401(k) plan in the General Business sector—and run by a corporation—there are specific administrative practices and processing times that need to be accounted for when preparing a QDRO.
Key QDRO Factors for the Johnson Controls Retirement Savings and Investment Plan
Dividing Contributions: Employee vs. Employer
This plan may contain both employee contributions (money the participant put in) and employer matching or profit-sharing contributions. A critical point is that employer contributions are often subject to vesting schedules.
- If the employer contributions are not fully vested at the time of divorce, only the vested portion is available for division.
- Unvested balances typically remain with the employee, even if the QDRO attempts to award them.
The QDRO should clearly state whether the division is based on the account balance as of a specific date (usually the date of separation or date of divorce) and whether it applies only to fully vested funds.
Vesting Schedules and Forfeitures
401(k) vesting schedules can vary significantly, especially when employer contributions are involved. Participants may become fully vested after a certain number of years of service. Knowing the schedule that applies to the participant is essential to avoid disputes after the QDRO is implemented.
We often include language in the QDRO to confirm that only vested amounts will be subject to division, unless the parties agree otherwise.
Loan Balances and Repayment Obligations
If the participant has taken a loan from the Johnson Controls Retirement Savings and Investment Plan, this will affect the account balance used for division. There are two key choices here:
- The QDRO can exclude the loan from the calculation, which means the alternate payee gets a share only of the net (after-loan) balance.
- Or, the QDRO can divide the gross balance including the loan, treating the loan as still part of the account for division purposes.
Each approach has pros and cons. At PeacockQDROs, we discuss these options with our clients to determine which structure best meets their needs.
Roth Subaccounts vs. Traditional 401(k) Subaccounts
This plan may include both traditional (pre-tax) and Roth (after-tax) contributions. Your QDRO should address how each type of contribution will be divided:
- Roth and traditional funds should usually be split proportionately unless otherwise agreed.
- Tax implications are dramatically different, so clarity in the order is critical.
Failing to account for the difference between Roth and pre-tax funds can result in major problems during distribution and even create unexpected tax consequences for one or both parties.
Drafting and Implementing the QDRO Correctly
A QDRO must be approved by both the court and the plan administrator. Johnson Controls, Inc. may have specific procedures or pre-approval requirements that control how long the review takes. Mistakes in the drafting can cause delays or outright rejection.
At PeacockQDROs, we’ve completed thousands of QDROs from start to finish. That means we don’t just draft the order and leave you to figure out the rest. We handle the drafting, preapproval (if applicable), court filing, submission, and follow-up with the plan administrator. That’s what sets us apart from firms that only prepare the document and hand it off to you.
We maintain near-perfect reviews and pride ourselves on a track record of doing things the right way. To avoid unnecessary delays or denials, make sure you understand common QDRO mistakes and how to avoid them.
How Long Will It Take?
Processing times can vary based on the plan administrator’s procedures and your court’s docket. However, most delays come from incorrectly prepared QDROs or missing steps in the process. Learn more about the five key factors that affect QDRO timing here.
Why Having the Right QDRO Team Matters
Our job is to take the stress out of the QDRO process for you. With the Johnson Controls Retirement Savings and Investment Plan, you’re working with a corporate 401(k) setup, which means additional layers of internal approval and documentation may be required. That’s where we come in.
At PeacockQDROs, we don’t just fill in blanks—we tailor the QDRO to fit your specific situation. Our team works directly with plan administrators, clerks, and legal officials to make sure everything is handled smoothly from beginning to end.
Take Action if You’re Dividing This Plan
If your divorce involves the Johnson Controls Retirement Savings and Investment Plan, make sure the final division is not only fair but also legally enforceable. Don’t assume the divorce judgment alone is enough. You need a properly drafted and approved QDRO to claim your share.
To begin working on your QDRO, check out our QDRO services or contact us to discuss your situation. The sooner you begin, the sooner we can help protect your share of the retirement benefits.
State-Specific Call to Action
If your divorce was in California, New York, New Jersey, Connecticut, Kansas, Missouri, Iowa, or North Dakota, and you have questions about qualified domestic relations orders or dividing retirement assets like the Johnson Controls Retirement Savings and Investment Plan, contact PeacockQDROs. We specialize in QDROs and have successfully processed thousands of orders from start to finish.
Get the answers you need—explore our QDRO resources or reach out for personalized help if you’re in one of our service states.