Employee vs. Employer Contributions
401(k) balances typically include both employee and employer contributions. In some cases, only the employee contributions are eligible for immediate division. Employer contributions may be subjected to a vesting schedule. That means the non-employee spouse (also called the “alternate payee”) might not be entitled to unvested contributions at the time of divorce.
In the QDRO, it’s critical to specify whether the alternate payee will receive a portion of the total account, just the vested portion, or only the employee contributions. This decision can have a significant financial impact.

