1. Employee vs. Employer Contributions
Most profit sharing plans include both employee salary deferrals and discretionary employer contributions. Depending on plan rules, employer contributions may not be immediately vested. When preparing a QDRO, it’s vital to distinguish sources of funds and clarify whether both vested and non-vested portions are to be divided.
If a court order attempts to divide unvested funds, the plan administrator will only recognize the vested portion. Language in the QDRO should either account for this or stipulate how forfeitures are to be handled if the participant loses unvested amounts post-divorce.

