Employee and Employer Contributions
Most 401(k) plans consist of two types of contributions:
- Employee Contributions: These are amounts the plan participant (your spouse or you) elects to defer from salary.
- Employer Contributions: These are funds added by the company, sometimes with a vesting schedule.
Employee contributions and their growth are usually 100% available for division. Employer contributions, however, may be partially or completely lost if they are unvested at the time of divorce. That’s a key area where mistakes often happen. An accurate QDRO will spell out how to treat both types of contributions.
Make sure your QDRO addresses whether you’re dividing just the vested balance or including the unvested amounts based on future vesting events. This will depend on state law and the terms of your settlement or property division agreement.

