Understanding QDROs and the The Next Street 401(k) Plan
If you or your spouse is a participant in the The Next Street 401(k) Plan and you’re going through a divorce, you’ll need to understand how this specific retirement account is divided. A Qualified Domestic Relations Order (QDRO) is the court order required to legally split a 401(k) in divorce. Without it, a plan administrator can’t pay benefits to an ex-spouse, even if the divorce decree says they should.
401(k) plans—like the The Next Street 401(k) Plan—raise many technical and financial issues in divorce that must be addressed correctly in the QDRO. From employer contributions and vesting schedules to loan balances and Roth accounts, every detail matters. Here’s how to approach dividing this particular plan.
Plan-Specific Details for the The Next Street 401(k) Plan
Before dividing the plan, let’s look at what we know so far about the The Next Street 401(k) Plan:
- Plan Name: The Next Street 401(k) Plan
- Sponsor: The next street, LLC
- Address: 20250529161108NAL0004918835001, 2024-01-01, THE NEXT STREET, LLC
- EIN: Unknown (required for QDRO processing)
- Plan Number: Unknown (required for QDRO processing)
- Industry: General Business
- Organization Type: Business Entity
- Participants: Unknown
- Plan Year & Effective Date: Unknown
- Status: Active
- Assets: Unknown
Note that even though the EIN and plan number are missing, these will be needed when the QDRO is submitted. At PeacockQDROs, we help you identify this information based on contact with the plan administrator.
What’s Divisible in a 401(k) Like The Next Street 401(k) Plan?
Unlike pensions, which pay a monthly benefit, 401(k) plans are account-based. That means the QDRO divides actual dollars in the plan as of a certain date—often the date of divorce or separation. Here’s what commonly comes into play with this plan:
Employee and Employer Contributions
Contributions made by the employee (the spouse who earned the account) are usually fully vested immediately. Employer contributions, however, might be subject to a vesting schedule. For The Next Street 401(k) Plan, any unvested amounts may be forfeited depending on the length of service. This can significantly affect what the alternate payee (ex-spouse) is entitled to.
The QDRO should include language to ensure only vested funds are divided, or clearly state whether unvested balances are considered. At PeacockQDROs, we review plan rules to make sure this is properly addressed.
Vesting Schedules and Forfeitures
The Next Street 401(k) Plan may apply a typical 3-to-6 year graded or cliff vesting schedule for employer contributions. If an employee leaves before they’re fully vested, part of the employer match could be forfeited. This needs to be reflected in the QDRO to avoid post-divorce surprises. Always clarify whether the division is based on the current vested balance or includes possible future vesting.
Loan Balances
If there’s an outstanding loan on The Next Street 401(k) Plan account, it must be accounted for in the QDRO. A loan reduces the available balance, but some couples choose to include the loan as part of the total balance being divided.
Options include:
- Divide the gross balance (including the loan amount)
- Divide the net balance (after subtracting the loan)
- Assign the loan to one party and divide the rest
Each method has pros and cons depending on whether the alternate payee will receive cash or roll over the funds into their own retirement plan. Our team works with you to select the approach that best fits your agreement.
Roth vs. Traditional Funds
The Next Street 401(k) Plan may offer both traditional 401(k) and Roth 401(k) contributions. Roth funds are after-tax, while traditional funds are pre-tax. This tax distinction is critical. Your QDRO must specify whether the division includes both types of accounts and how to handle them in the rollover or distribution process.
If you’re receiving Roth funds, those must be rolled into a Roth IRA. Mixing Roth and traditional funds in a transfer can trigger tax penalties if done incorrectly. We draft QDROs with the right tax language to ensure your transfer is clean.
Key Steps in the QDRO Process for This Plan
Step 1: Review Plan Documents
Before drafting the QDRO, it’s essential to review The Next Street 401(k) Plan’s Summary Plan Description and obtain the QDRO procedures from The next street, LLC. This step helps identify any plan-specific rules regarding vesting, loans, distribution timing, and alternate payee options.
Step 2: Draft the QDRO
The order must specify the amount or percentage the alternate payee will receive, the valuation date, treatment of investment earnings or losses, and how taxes will be handled. At PeacockQDROs, we ensure your order satisfies the plan’s rules and language requirements.
Step 3: Preapproval (If Provided)
Some administrators allow for a preapproval process. If The next street, LLC offers this, it can help avoid rejection after court entry. We’ll handle submission and any revisions required by the plan administrator.
Step 4: Court Filing
Once approved or finalized, the QDRO is filed with the divorce court and signed by a judge. Then we prepare it for submission to the plan administrator.
Step 5: Submission and Follow-Up
Submitting the signed order to The Next Street 401(k) Plan’s administrator isn’t the final step. You’ll need to ensure the plan actually processes the order and creates the alternate payee’s account or issues payment. We follow up with the administrator until everything is complete, and our job isn’t done until the benefits are in the alternate payee’s control.
Common QDRO Mistakes to Avoid with This 401(k) Plan
Plans like The Next Street 401(k) Plan come with common traps. Learn more about these issues at our QDRO mistake guide. Here are a few to watch out for:
- Failing to divide Roth and traditional accounts separately
- Ignoring current loan balances
- Using a valuation date that causes unfair distribution
- Failing to clarify how lost or forfeited employer match is handled
- Not including investment gains/losses from valuation date to distribution date
Why Choose 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. We also provide detailed timelines: how long does a QDRO take?
Need Help? Let’s Talk About Your Specific Case
If you’re divorcing and the The Next Street 401(k) Plan is part of the marital estate, make sure it’s divided the right way the first time. With multiple account types, vesting rules, and potential loans, 401(k) plans require precision. Don’t trust your future to guesswork.
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 Next Street 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.