1. Employer Contributions and Vesting Rules
Profit sharing plans like this one typically offer employer contributions based on the company’s performance. But just because the employer makes a contribution doesn’t mean it’s all yours immediately. Many plans include a vesting schedule, meaning the employee earns rights to the money over time.
For example, if your spouse worked at Northern manufacturing Co.., Inc.. profit sharing plan for 5 years, and the plan uses a 6-year graded vesting schedule, only a portion of their employer-funded account may be “vested” and divisible in the QDRO. The non-vested portion may be forfeited if employment ends before full vesting occurs. This is where a QDRO attorney familiar with plan rules becomes essential.

