RETIREMENT SAVINGS PLAN FOR EMPLOYEES OF WEST PENN ALLEGHENY HEALTH SYSTEM is a DEFINED CONTRIBUTION PLAN. Typically, a Company Sponsor (Employer) of this type of plan creates an account for every individual Participant. Regular contributions are then made by the Employer, the Participant, or both. Examples of this plan type are Employee Stock Ownership Plan (ESOP), Profit-Sharing Plans, 401(a), Savings Plans and 401(k).
A division of this type of account must be done by way of a Qualified Domestic Relations Order (QDRO). When dividing a defined contribution plan, the Alternate Payee is typically awarded a portion of the Participant's account balance as of a specific date (the "Valuation Date" or "Assignment Date"). In most cases, the Alternate Payee’s portion must be expressed as either a specific dollar amount, or as a percentage of the account. Most defined contribution plans do not permit an award to be expressed as "marital coverture formula", such as: "50% of the amount accrued from the date of marriage to the date of separation or divorce". With a few exceptions, a QDRO containing a marital coverture formula for division of a defined contribution account will likely be rejected by the appropriate Plan Administrator.
Once a QDRO is approved, the Plan Administrator will establish a separate account for the Alternate Payee. If permitted by the terms of the plan, the Alternate Payee may have the opportunity to utilize investment options that are available for other plan participants. This type of plan generally allows an Alternate Payee to receive an immediate lump sum distribution (or withdrawal) upon approval of a QDRO. Alternatively, the Alternate Payee may choose to transfer the awarded funds to another tax deferred account of their choice - for example, to an IRA (Individual Retirement Account). It is critical that the Alternate Payee consult with a tax professional before making any transfers or withdrawals in order to be fully informed as to any potential tax consequences arising from either the nature or timing of the withdrawal or transfer.
Features of the RETIREMENT SAVINGS PLAN FOR EMPLOYEES OF WEST PENN ALLEGHENY HEALTH SYSTEM may include:
- This Plan permits Participants to direct the investment of his or her retirement accounts.
- This is a 403(b)(1) plan for certain employees of public schools and tax-exempt organizations. Participants include teachers, school administrators, professors, government employees, nurses, doctors, and librarians, and investments are in annuity contract(s)
- This is a 403(b)(7) plan for certain employees of public schools and tax-exempt organizations. Participants include teachers, school administrators, professors, government employees, nurses, doctors, and librarians, and investments are in a custodial agreement where the investments are typically in mutual funds
- This is a plan where Participant-directed brokerage accounts are provided as an investment option
- This is a plan that provides for total or partial participant-directed account(s). In other words, this Plan uses a default investment account for participants who fail to direct assets in their account.
The Plan features and descriptions presented are provided only as examples and
descriptions a particular type of plan. Participants and Alternate Payees should
review the applicable Summary Plan Description for a detailed description of the
specific terms and options for the specific Plan in question.
The information provided on this page is based upon the most recent Plan tax filings
available. The terms of a specific plan may have changed since the most recently
available tax filing, and as a result, these descriptions and features may not be
current. QDRO.com makes no representations as to accuracy of these
QDRO.com is neither the administrator, nor a
of this Plan. QDRO.com provides this information merely as a courtesy and makes no
warranties as to the current status or accuracy of these descriptions.