Employee and Employer Contributions
A crucial point in 401(k) QDROs is distinguishing what parts of the account are from employee contributions vs. employer contributions. In the case of the Worldwide Jet Charter Inc.. 401(k) Profit Sharing Plan and Trust, the employee’s own deferrals are always fully vested. However, employer contributions may be subject to a vesting schedule.
For example, let’s say the employer makes a 5% profit-sharing contribution but the employee is only 60% vested at the time of divorce. A QDRO can only divide what is vested. The non-employee spouse may lose out on the unvested portion. Vesting schedules should always be reviewed closely during the QDRO drafting process.

