When a marriage ends, dividing retirement assets like the Hess Corporation Employees’ Savings Plan can get complicated quickly. If you’re dealing with this plan in a divorce, you’ll likely need a Qualified Domestic Relations Order—commonly called a QDRO. At PeacockQDROs, we’ve handled many QDROs from start to finish, and we see all kinds of challenges, especially with 401(k) plans like this one. This article breaks down what you need to know to properly divide the Hess Corporation Employees’ Savings Plan and avoid costly mistakes.
A QDRO is a court order that gives someone other than the employee—such as a former spouse—the legal right to receive a portion of the employee’s retirement account. Without a valid QDRO, the plan administrator cannot pay a former spouse directly from the Hess Corporation Employees’ Savings Plan, even if the divorce decree grants them a share.
Before you or your attorney starts drafting a QDRO, it’s important to understand the actual plan you’re dealing with. Here are the known details for this specific retirement plan:
Even though the EIN and Plan Number are unknown, these details are typically required in the QDRO itself. They can be obtained directly from a plan statement or by contacting the plan administrator.
The Hess Corporation Employees’ Savings Plan is a 401(k) plan, which brings certain specific considerations when dividing it in a divorce:
You need to determine whether the division includes just the employee’s contributions or also the employer’s match. Both are usually divisible, but some employer matches may not be fully vested. The QDRO should specify the percentage or dollar amount to be awarded, and whether it includes gains and losses from the date of division to the date of distribution.
401(k) employer contributions often have vesting schedules. This means a portion of the employer’s contributions may not belong to the employee until they’ve worked a certain number of years at Hess. A QDRO cannot assign unvested amounts to a former spouse. If a large portion of the balance in the Hess Corporation Employees’ Savings Plan is not vested, it could greatly affect the share a spouse receives.
If the employee has taken out a loan from their Hess Corporation Employees’ Savings Plan balance, this must be considered. Loan balances reduce the account value, and QDROs must specify whether to include or exclude loan balances when calculating the division. If the plan participant is responsible for repaying the loan, but the balance is included in the QDRO language, the alternate payee may get more than was actually available in liquid assets.
This plan may contain both traditional pre-tax contributions and Roth post-tax contributions. The QDRO must distinguish between these two accounts and allocate each one accordingly. Mistakes here can create tax consequences and delay distributions.
Here’s a basic timeline for how we handle QDROs at PeacockQDROs:
We handle every step of this process for our clients. Too many firms just hand you a document draft and leave you on your own. We don’t. That’s why we maintain near-perfect reviews and pride ourselves on a track record of doing things the right way.
Read more about the full QDRO process here:QDRO completion timeline
Many QDROs use a valuation date far from the divorce date, which can make the division unfair. The right QDRO language should tie the division to a specific date such as the date of divorce or legal separation.
It’s essential to specify how each type of contribution—pre-tax vs. Roth—is handled. A failure to do so can result in IRS reporting errors or withdrawal issues for the alternate payee.
This is a common pitfall. QDROs should clearly define whether the division is before or after subtracting any outstanding loan balances.
If the QDRO doesn’t include market fluctuations, the alternate payee could lose out on thousands of dollars (or receive too much). Always spell out whether gains and losses are included.
Get more advice about avoiding common QDRO pitfalls here:
At PeacockQDROs, we’ve completed many orders just like the one you’ll need for the Hess Corporation Employees’ Savings Plan. We don’t just create a document and send you on your way—we walk you through every step, from drafting, preapproval, and court filing, to final submission and follow-up with the plan administrator.
We know this specific plan type and how to handle everything from unvested employer contributions to plans with both Roth and traditional accounts. Plus, since this is a general business plan under a business entity structure, we understand the employer approval process and how to keep things moving.
Want to learn more? Explore our QDRO services here:
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 Hess Corporation Employees’ Savings Plan, contact PeacockQDROs. We focus on QDROs and have successfully processed many orders from start to finish.
Get the answers you need—explore ourQDRO resources orreach out for personalized help if you’re in one of our service states.
Willie has handled hundreds of QDROs, been named as a stipulated or court-appointed expert in hundreds of orders, testified as an expert witness on QDROs and state government pension survivor benefits, and taught CLEs on QDROs, legal ethics, and military pensions. He is a three-time ABA award-winning legal author and secured a victory before the North Dakota Supreme Court. Full bio →
