A QDRO that provides for shared payments must specify the date on which the alternate payee will begin to share the participant’s payments. Such a date, however, cannot be earlier than the date on which the plan receives the order. With respect to a separate interest, an order may either specify the time (after the order is received by the plan) at which the alternate payee will receive the separate interest or assign to the alternate payee the same right the participant would have had under the plan with regard to the timing of payment. In either case, a QDRO cannot provide that an alternate payee will receive a benefit earlier than the date on which the participant reaches his or her “earliest retirement age,” unless the plan permits payments at an earlier date.

The plan itself may contain provisions permitting alternate payees to receive separate interests awarded under a QDRO at an earlier time or under different circumstances than the participant could receive the benefit. For example, a plan may provide that alternate payees may elect to receive a lump sum payment of a separate interest at any time. Section 401(a)(9) of the Code may affect when benefits must be paid under tax-qualified retirement plans.

Reference: [ERISA §§ 206(d)(3)(C), 206(d)(3)(D), 206(d)(3)(E); IRC §§ 401(a) (9), 414(p)(2), 414(p)(3), 414(p)(4)]