Splitting Retirement Benefits: Your Guide to QDROs for the Torrid 401(k) Plan

Many people don’t realize that 401(k) accounts often include both employee and employer contributions. In most cases, employee deferrals are fully vested immediately, but employer contributions are often subject to a vesting schedule.

In the case of the Torrid 401(k) Plan, it’s important to determine:

• What percentage of the employer contributions are vested
• The timeline of vesting for unvested funds
• Whether non-vested amounts will be forfeited or reserved for future vesting

The QDRO should clearly state that only vested employer contributions as of the date of division are transferable to the alternate payee. This helps avoid future conflict and delays in implementing the order.

If the plan participant has taken a loan from their Torrid 401(k) Plan, it impacts the divisible balance. Loans reduce the total value available for division, but that doesn’t mean the alternate payee should automatically absorb the impact.

There are two common options:

• Reduce both parties’ shares proportionally – The loan is handled like a marital debt.
• Allocate the loan solely to the participant – Keeping the alternate payee’s share based on the pre-loan balance.

The right choice depends on state laws and how debts were divided in your divorce. The QDRO must clearly specify how to treat plan loans, or it may delay plan approval.

The Torrid 401(k) Plan may include Roth and traditional (pre-tax) components. Each works differently from a tax standpoint and must be handled separately in a QDRO.

Roth 401(k) balances grow tax-free and are taxed differently than traditional funds. The QDRO should specify how each source is treated—especially if only one account type is being split, or if both need to be split proportionally.

Failing to address this distinction properly can lead to incorrect transfers and unwanted tax consequences for the alternate payee.

You’ll need the following to start the QDRO draft for the Torrid 401(k) Plan:

• Full names of participant and alternate payee
• Last known addresses and Social Security numbers
• A copy of the divorce decree or marital settlement agreement
• Plan administrator information (found by contacting Torrid LLC or referencing plan documents)
• The plan’s official name: Torrid 401(k) Plan
• Plan number and EIN (available in plan summary documents or by request)

If this information is missing or incomplete, it can delay the QDRO and potentially delay your access to the funds.

Each plan has its own rules. Some require preapproval, while others go directly to final processing with the divorce judgment. The Torrid 401(k) Plan is a 401(k) plan under a business entity, so the QDRO must match their administrator’s format preferences and processing standards.

Key elements in the QDRO should include:

• Clear identification of the plan name (Torrid 401(k) Plan)
• A specific award to the alternate payee (percentage, dollar amount, or formula)
• The exact date of division (often tied to the date of divorce)
• Instructions on how to handle loans, Roth balances, and investment earnings or losses

Once the QDRO is drafted, it must be filed with the same court that handled the divorce. After court approval, it gets submitted to the Torrid 401(k) Plan’s administrator for review and implementation.

Plans often have a review period (30-60 days) during which they’ll confirm whether the QDRO meets their rules. If there are errors or omissions, they will reject it until corrections are made. This is why accuracy matters.