Employee and Employer Contribution Divisions
Employee contributions (pre-tax or Roth) are typically 100% vested. Employer contributions may be subject to a vesting schedule, meaning the employee must meet certain service requirements to keep that money. In divorce, a QDRO can divide only what the employee is actually entitled to as of the division date. Unvested employer contributions usually don’t get divided unless the employee becomes vested later and the QDRO includes a provision for post-divorce vesting.
A well-drafted QDRO should clearly state whether the alternate payee (the ex-spouse receiving a portion of the funds) is entitled to any future vesting of employer contributions. At PeacockQDROs, we clarify and customize this based on your goals and the specific terms of the plan.

