Understanding QDROs in Divorce
When a couple decides to divorce, dividing financial assets can get tricky—especially when it comes to retirement plans. If one or both spouses have savings in a 401(k), those funds are often subject to division under a Qualified Domestic Relations Order (QDRO). A QDRO is a court order that makes it possible to transfer a portion of a retirement account to an ex-spouse without penalties or taxes.
In this article, we’re focusing specifically on how to divide the Thoroughbred Retirement Investment Plan of Norfolk Southern Corporation and Participating Subsidiary Companies through a QDRO. This plan is a 401(k) offered to employees of the Norfolk Southern Corporation and its subsidiaries—a high-value asset for many individuals working in the general business sector.
Plan-Specific Details for the Thoroughbred Retirement Investment Plan of Norfolk Southern Corporation and Participating Subsidiary Companies
- Plan Name: Thoroughbred Retirement Investment Plan of Norfolk Southern Corporation and Participating Subsidiary Companies
- Sponsor: Thoroughbred retirement investment plan of norfolk southern corporation and participating subsidiary companies
- Address: 650 West Peachtree Street NW
- Dates: Plan Active for Plan Year 2024 (01/01/2024 – 12/31/2024); Originally Effective 04/01/1995
- Industry: General Business
- Organization Type: Business Entity
- Status: Active
- Plan Number: Unknown (must be obtained for QDRO submission)
- EIN: Unknown (required for processing)
- Participants: Unknown
- Assets: Unknown
Although the EIN and Plan Number are currently not available in the disclosed data, these are typically required to successfully submit a QDRO to the plan administrator. We recommend obtaining a recent statement or contacting the plan administrator directly.
Key Aspects of Dividing This 401(k) Plan in Divorce
Splitting a 401(k) like the Thoroughbred Retirement Investment Plan of Norfolk Southern Corporation and Participating Subsidiary Companies requires close attention to the specifics of how the plan operates. Here’s what you need to know.
Employee and Employer Contributions
This 401(k) includes both employee deferrals and employer matching contributions. While the employee’s contributions are 100% theirs, employer contributions may be subject to a vesting schedule. Any unvested employer match may be forfeited if the employee leaves the company before meeting service requirements. A QDRO can only award the vested portion of the account.
Vesting Schedules
The vesting period tied to the employer’s contributions is critical. If your spouse is not fully vested at the time of divorce (or at the date of division defined in the QDRO), you may not be entitled to the full match they received. It’s crucial to confirm the exact vesting percentage and define the “as of” date in your QDRO to ensure clarity.
401(k) Loan Balances
If the participant has taken out a loan against the account, that affects the balance available for division. The loan amount is not divisible and generally remains the responsibility of the account holder. You can choose to divide the net balance after subtracting the loan, or opt to split before subtracting the loan—it all depends on the agreement reached during divorce proceedings. Be sure this is addressed clearly in the QDRO language.
Roth vs. Traditional Account Types
The Thoroughbred Retirement Investment Plan of Norfolk Southern Corporation and Participating Subsidiary Companies may include both traditional (pre-tax) and Roth (post-tax) components. The QDRO should specify whether the alternate payee is receiving a portion of each or only specific account types. This is critical due to tax treatment differences. Roth funds retain their post-tax status even after transfer, which can benefit the alternate payee if managed correctly.
Best Practices When Drafting a QDRO for this Plan
Define a Specific Division Date
The division date establishes the snapshot of the account’s value used for QDRO purposes. Common choices include the date of separation, date of divorce, or date of QDRO entry. Consistency matters because market fluctuations can significantly impact values.
Address Market Gains and Losses
If the QDRO is processed weeks or months after the division date, the value of investments may have increased or decreased. Make sure your QDRO language says whether the alternate payee receives market gains or losses from the chosen division date until the date of transfer.
Clarify Tax Responsibility
The alternate payee is responsible for taxes on distributions received once funds are transferred via QDRO, unless they roll over the amount into an IRA (which is often advisable). The participant won’t pay taxes on the portion assigned to the alternate payee.
Unique QDRO Considerations for Business Entity Plans
Business entities like the sponsor of this plan—the Thoroughbred retirement investment plan of norfolk southern corporation and participating subsidiary companies—often outsource 401(k) administration. It’s essential to identify the current administrator (often large firms like Fidelity or Vanguard) and follow their QDRO procedures exactly. Their process may include pre-approval, which helps avoid costly court corrections.
Ensure your QDRO is tailored to this plan’s administrative nuances, including how they calculate gains/losses, vesting, Roth accounts, and whether electronic or paper submissions are required.
Common Mistakes to Avoid
We’ve seen countless issues arise with generic or DIY QDROs. These are the most frequent mistakes:
- Failing to include vesting provision details
- Omitting Roth vs. Traditional designations
- Wrongly assuming loan balances are divisible
- Not clarifying market gains or losses
- Leaving out plan number or EIN
We’ve created a complete guide on common QDRO mistakes to help you avoid these pitfalls.
PeacockQDROs: Helping You Do It Right
At PeacockQDROs, we’ve completed thousands of QDROs from start to finish. That means we don’t just draft the order and leave you to figure out the rest. We handle the drafting, preapproval (if applicable), court filing, submission, and follow-up with the plan administrator. That’s what sets us apart from firms that only prepare the document and hand it off to you.
We pride ourselves on doing things the right way—and it shows. We maintain near-perfect reviews and a consistent track record of successful submissions. Every plan is different. That’s why we work with you to make sure all plan-specific rules are followed, including those unique to the Thoroughbred Retirement Investment Plan of Norfolk Southern Corporation and Participating Subsidiary Companies.
Timeframe Expectations
Wondering how long it’ll take to get your QDRO processed? The answer depends on several factors. Check out our detailed explanation here: 5 Factors That Determine How Long It Takes To Get A QDRO Done.
Next Steps
If your divorce was in California, New York, New Jersey, Connecticut, Kansas, Missouri, Iowa, or North Dakota, and you have questions about qualified domestic relations orders or dividing retirement assets like the Thoroughbred Retirement Investment Plan of Norfolk Southern Corporation and Participating Subsidiary Companies, contact PeacockQDROs. We specialize in QDROs and have successfully processed thousands of orders from start to finish.
Get the answers you need—explore our QDRO resources or reach out for personalized help if you’re in one of our service states.