1. Employee vs. Employer Contributions
With 401(k) plans, contributions can come from both the employee (through salary deferral) and the employer (through match or discretionary contributions). A common mistake is assuming all contributions belong equally to the employee. However, employer contributions are often subject to a vesting schedule depending on years of service. That means some of the employer-funded portion of the account may not be “owned” by the participant yet. When drafting a QDRO for this plan, it’s crucial to:
- Clarify if the division applies only to vested benefits
- Choose between dollar amounts, percentages, or allocation formulas
- Explicitly state whether the alternate payee shares in gains/losses

