Employee vs. Employer Contributions
Profit sharing plans typically include contributions from the employer that may not be fully vested. Depending on the plan’s vesting schedule, the employee may not own 100% of the employer’s contributions at the time of divorce. It’s important to determine:
- Whether the participant is fully vested
- How unvested assets will be handled (they may revert to the plan if forfeited)
- Whether the QDRO should only divide vested amounts or include provisions for future vesting
A great QDRO should include clear language about how the plan administrator should handle any unvested contributions. In some cases, we recommend a “shared interest” approach where the alternate payee waits for benefits to vest over time, depending on the couple’s agreement.

