1. Employee vs. Employer Contributions
401(k) plans generally include two types of funds: employee salary deferrals and employer contributions. It’s essential to define how the QDRO will divide each type. For example:
- Employee contributions are always 100% vested and can be split without issue.
- Employer contributions may be subject to a vesting schedule, and any unvested amounts are typically forfeited if the employee leaves before full vesting.
We often recommend language in the QDRO that awards a percentage of only the vested balance. That way, the alternate payee doesn’t end up waiting for future employer contributions that may never fully vest.

