1. Watch for Employer Contributions That Haven’t Vested
The Pegs Management Company 401(k) Plan likely includes both employee and employer contributions. Many 401(k) plans have vesting schedules that delay full ownership of employer contributions. When a QDRO is being prepared, we need to identify:
- Which portion of the account is vested
- The date of separation or date to value the account
- Whether unvested amounts will eventually vest or be forfeited
Only the vested part of the employer contributions can be divided in most QDROs. However, it’s essential to draft language that addresses whether the alternate payee (usually the ex-spouse) has any claim to reinstated or post-divorce vesting amounts.

