Loan Balances
If the participant has taken a loan from their 401(k), it reduces the account balance. The QDRO must specify whether the loan balance is deducted before or after calculating the Alternate Payee’s share. Some QDROs specify that the Alternate Payee’s share is taken from the net balance (after subtracting the loan), while others apply the division before any loan is considered.
This decision affects how much the Alternate Payee receives—don’t guess. We recommend addressing this directly with the plan administrator before the QDRO is finalized.

