Understanding QDROs for the The Bank & Trust 401(k) and Profit Sharing Plan
If you or your spouse participates in the The Bank & Trust 401(k) and Profit Sharing Plan through Westex bancorp, Inc., and you’re divorcing, a Qualified Domestic Relations Order (QDRO) is often required to divide the retirement benefits. A QDRO serves as the legal vehicle to assign a portion of retirement account assets to a former spouse or other alternate payee. When it comes to a 401(k) plan, which can include both traditional and Roth contributions, plus employer matching and profit-sharing elements, drafting a QDRO correctly is critical. Mistakes can be costly—and irreversible.
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.
Plan-Specific Details for the The Bank & Trust 401(k) and Profit Sharing Plan
- Plan Name: The Bank & Trust 401(k) and Profit Sharing Plan
- Sponsor: Westex bancorp, Inc.
- Plan Type: 401(k) and Profit Sharing
- Industry: General Business
- Organization Type: Corporation
- Plan Number: Unknown (required for QDRO documentation—obtain from plan administrator)
- Employer Identification Number (EIN): Unknown (also needed for QDRO documents)
- Plan Effective Date: 1985-04-19
- Plan Year: 2024-01-01 to 2024-12-31
- Status: Active
- Participants: Unknown
- Assets: Unknown
Because this plan is active and associated with a corporate sponsor in a general business context, it’s critical to understand internal policies and procedures on QDROs before submitting your order.
What Makes 401(k) QDROs Unique?
Unlike pensions, 401(k) plans like the The Bank & Trust 401(k) and Profit Sharing Plan are defined contribution plans. This means the value isn’t calculated based on years worked or salary formulas—it’s just the balance in the account at the time of division. However, there are several traps that can lead to disputes or IRS issues if not handled correctly.
Employee and Employer Contributions
Contributions to this plan likely come from both the employee (deferrals) and Westex bancorp, Inc. (employer match or profit sharing). A QDRO must address:
- Whether the alternate payee receives a portion of just the employee contributions, or both employee and employer contributions
- Whether the amount includes future earnings or is cut off at a specific date
- How investment gains/losses are to be applied
Let’s say the plan participant accrued a $100,000 balance, including $20,000 in employer contributions. If those employer contributions are unvested, that portion may eventually be forfeited—and the QDRO should account for that possibility.
Vesting and Forfeited Amounts
401(k) employer contributions often come with a vesting schedule. If the employee hasn’t been with Westex bancorp, Inc. long enough, some employer contributions may not be kept. QDROs should include language clarifying the alternate payee only receives the vested portion, or else risk unexpected results.
Loan Balances
If the participant has an outstanding 401(k) loan, you’ll need to decide whether the alternate payee’s share is calculated before or after deducting the loan. Failing to clarify this in the order can lead to confusion and future litigation.
Here are the two general approaches:
- Account balance net of loan: Divide only what’s actually in the account (after subtracting loan)
- Account balance before loan: Divide the theoretical full value as if the loan didn’t exist, with loan remaining the participant’s burden
Roth vs. Traditional Contributions
The The Bank & Trust 401(k) and Profit Sharing Plan may hold both pre-tax (traditional) and after-tax (Roth) account balances. A QDRO must clarify:
- Whether the division applies proportionally across account types
- Whether the alternate payee is entitled to receive only pre-tax, only Roth, or both
- Tax implications for the alternate payee based on each account type
Mistaken Roth designations on QDRO payouts result in unintended tax hits for both parties. It’s crucial to label these correctly.
Drafting a QDRO for the The Bank & Trust 401(k) and Profit Sharing Plan
Because this is a corporate-sponsored plan, Westex bancorp, Inc. and their plan administrator are expected to have a QDRO review and preapproval process. Submitting a QDRO that doesn’t meet their rules could delay approval or cause rejection.
Here are some best practices specific to dividing this plan:
- Request the plan’s QDRO procedures and sample language—if available—from the administrator
- Specify how loans, vesting, and contribution types should be handled
- Include alternate payee rights to investment gains/losses from the date of division
- Don’t guess at required information like the plan number or EIN—verify with HR or plan admin
Avoiding Common QDRO Mistakes
Wrongly assuming full employer contributions are available, ignoring outstanding loans, or mishandling Roth balances can derail a divorce settlement and cause tax issues. We’ve outlined more of these traps here: Common QDRO Mistakes.
Dividing a 401(k) plan in divorce isn’t plug-and-play—it requires attention to the plan’s unique characteristics, like those in The Bank & Trust 401(k) and Profit Sharing Plan. Every QDRO should be custom-tailored.
How Long Does the QDRO Process Take?
Most people don’t realize that the QDRO process has many steps—from drafting, to court signature, to submission to the plan, to confirmation and account split. This isn’t instant. The timeline will partly depend on how responsive the plan administrator for The Bank & Trust 401(k) and Profit Sharing Plan is. Want to understand all five factors? Here’s our guide on how long QDROs take.
How PeacockQDROs Can Help
We don’t just prepare the document and send you on your way. At PeacockQDROs, we manage the full process start-to-finish so you’re not left guessing. We bring deep experience in 401(k) plan specifics, like vesting schedules, employer match rules, Roth account divisions, and loan offset strategies.
We maintain near-perfect reviews and pride ourselves on a track record of doing things the right way. If you’re feeling stuck or don’t even know where to start, we’re here. Visit our QDRO resource center, or reach out for personalized help.
Final Thoughts
Dividing retirement account assets like the The Bank & Trust 401(k) and Profit Sharing Plan requires more than just plugging numbers into a template. Knowing the nuances of this plan and employer matters. A properly executed QDRO protects both parties and brings peace of mind—without IRS surprises or failed orders.
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 The Bank & Trust 401(k) and Profit Sharing Plan, 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.