Introduction
Dividing retirement accounts in a divorce can be one of the most complex parts of the process—especially when the account is a 401(k) and the employer’s plan has unique rules. If you or your spouse has funds in the Lima Memorial Health System 401(k) Plan, you’ll need a Qualified Domestic Relations Order (QDRO) to legally and properly split those assets. This guide walks you through the key steps, plan-specific rules, and common issues that arise with this type of 401(k) plan—so you can protect your benefits during and after divorce.
What Is a QDRO and Why Do You Need One?
A QDRO is a legal order following a divorce or legal separation that splits a retirement plan and grants a portion to an alternate payee—typically a former spouse. Without a QDRO, the plan administrator of the Lima Memorial Health System 401(k) Plan cannot legally distribute benefits to anyone other than the plan participant.
QDROs are essential because they ensure:
- Tax-deferred transfers to the former spouse
- No early withdrawal penalties for the recipient if funds are rolled into an IRA
- Clear division in accordance with the divorce ruling
Plan-Specific Details for the Lima Memorial Health System 401(k) Plan
Because each retirement plan has its own requirements and procedures, it’s crucial to understand the specific details of the Lima Memorial Health System 401(k) Plan when preparing a QDRO.
- Plan Name: Lima Memorial Health System 401(k) Plan
- Sponsor: Unknown sponsor
- Address: 1001 BELLEFONTAINE AVE
- EIN: Unknown
- Plan Number: Unknown
- Industry: General Business
- Organization Type: Business Entity
- Status: Active
- Effective Date: 1998-01-01
You’ll need the EIN and plan number to complete and file your QDRO, so make sure to request that information directly from the plan administrator if it’s not available in the summary plan description.
Dividing Contributions: Employee and Employer
The Lima Memorial Health System 401(k) Plan likely includes both employee salary deferrals and employer matching contributions. It’s important to clearly specify which portion of the account is being divided and for what timeframe.
Employee Contributions
Employee contributions are typically 100% vested immediately and can be divided based on a set dollar amount, percentage, or marital coverture formula (a formula dividing the account based on time the couple was married during participation in the plan).
Employer Contributions and Vesting
Employer contributions may be subject to a vesting schedule. If part of the employer contributions are unvested at the time of division, they cannot be awarded to the non-participant spouse. The QDRO must state whether any non-vested funds should be included in the calculation or excluded entirely.
This is a common mistake we correct in QDROs all the time. You need to make sure the order reflects only the vested portion of the account, or else the administrator may reject it.
Loan Balances and Their Impact
If the participant spouse has taken out a loan against their Lima Memorial Health System 401(k) Plan, that loan balance reduces the cash value of the account. The QDRO must address whether the loan is shared proportionally or assigned solely to the participant.
Here are a few approaches:
- Exclude the loan: Award the alternate payee a share of the account net of the loan.
- Include the loan: Award the alternate payee a share including the loan (as if the loan money is still in the account).
- Offset: Divide the account excluding the loan, but assign full responsibility for the loan to the participant.
At PeacockQDROs, we’ll help you craft language that reflects your specific agreement and ensures compliance with plan terms.
Roth vs. Traditional 401(k) Subaccounts
Some 401(k) plans include both Roth and Traditional subaccounts. Roth contributions are made after tax, while traditional contributions grow tax-deferred until withdrawal. When dividing the Lima Memorial Health System 401(k) Plan, it’s critical to:
- Identify which account types exist (Roth, traditional, or both)
- Specify whether the alternate payee will receive a proportional share of each account type
- Ensure the QDRO preserves the tax status of the funds when transferred
Failing to handle Roth vs. traditional properly can cause tax reporting issues and headaches for both parties. We make sure each QDRO we prepare separates these accounts correctly and in alignment with IRS rules.
Drafting and Preapproval
Many plan administrators—including those for the Lima Memorial Health System 401(k) Plan—recommend submitting a draft of the proposed QDRO for preapproval before filing it with the court. This can save time and avoid rejections later.
Here’s how the process typically works:
- Request required plan documents from the administrator
- Draft the QDRO with detailed terms on division
- Submit for preapproval, if the plan allows
- File the approved version with the court
- Send the signed copy to the plan for implementation
At PeacockQDROs, we don’t just draft your QDRO—we handle the full process:
- We collect plan-specific rules
- We get your QDRO preapproved if needed
- We file the order with the court
- We follow up with the plan until the funds are divided
See how our QDRO service works from start to finish.
Avoiding Common QDRO Mistakes
Thousands of QDROs get rejected every year due to simple but costly mistakes. With the Lima Memorial Health System 401(k) Plan, here are a few red flags to watch for:
- Not specifying the vesting status of employer contributions
- Leaving out how Roth and Traditional accounts are divided
- Failing to address outstanding loan balances
- Using generic template language not tailored to this plan
You can avoid these traps by working with professionals who specialize in QDROs. Check out some of the most common QDRO errors here.
Timeline Considerations
Most people underestimate how long it takes to finalize a QDRO. Even simple plans can take months from drafting to final approval and processing. Factors that affect timing include court backlog, plan response time, and negotiation details.
Understand the 5 main factors that influence your QDRO timeline before you begin.
Why Work With PeacockQDROs?
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 maintain near-perfect reviews and pride ourselves on a track record of doing things the right way. When you’re dealing with outcomes that impact your long-term financial future, nothing matters more than accuracy and experience.
Final Thoughts
Dividing the Lima Memorial Health System 401(k) Plan in divorce takes detailed attention to plan rules, clear communication with the administrator, and error-free legal language. From Roth accounts to loan balances, every element must be addressed the right way. Working with QDRO professionals can make all the difference in protecting your share of retirement assets.
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 Lima Memorial Health System 401(k) 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.