Last Updated on September 28, 2023 by Turner Thornton
If you are getting a divorce and have a retirement account, you will likely hear your attorney refer to a Qualified Domestic Relations Order, or QDRO. This is an important document in the divorce process, as it will order the division of a couple’s retirement savings. In this blog post, we will explain a QRDO and how it works in Texas divorce cases.
While we don’t handle QDROs ourselves because it makes sense to use someone who works exclusively on QRDOs, we believe it is important for our clients to understand what these are.
What is a QDRO?
A Qualified Domestic Relations Order (QDRO) is a legal order following a divorce or legal separation that splits and changes the ownership of a retirement plan to give the divorced spouse his or her share of the asset. The Employees Retirement System of Texas (ERS) must receive a photocopy of the divorce decree and the original certified copy of the QDRO for review and approval.
Benefits are payable to an alternate payee only if ERS determines the order to be a valid ERS QDRO, according to Texas law.
How does an ERS QDRO work?
After ERS has a copy of the divorce decree and approves the original certified copy of the QDRO, it can’t issue payments to the alternate payee until one of the following occur:
* The member retires and starts receiving a monthly payment in which case you will receive a portion of the payment each month;
* The account holder quits working for the state and takes a one-time refund of their ERS retirement account in which case you will receive a one-time portion of the refund;
* The account holder passes away and the ERS account becomes a payable death benefit in which case you will receive a portion of what the estate/beneficiary(ies) receives; or
* The account holder takes another distribution required by law in which case payment amounts and disbursement to the alternate payee will depend on the type of distribution.
Once one of the actions listed above has occurred, ERS will contact the alternate payee, in writing, to provide the amount and the steps to claim the payment(s).
How do you submit a QDRO to ERS?
Qualified Domestic Relations Orders are very technical and can be extremely complicated. It's best to let a legal professional draft and file a QRDO, but it is possible to do it yourself. When drafting a QDRO, it's important to follow the template provided by ERS. Be sure you have all the necessary information and signatures before submitting your draft for approval.
Mail the certified copy of the QDRO and a photocopy of the final decree of divorce to either of the addresses listed below:
P.O. Box 13207
Austin, TX 78711-3207
200 E. 18th St.
Austin, TX 78701-1400
If my ex-spouse is still working for the state, when do I get my share?
State employees can’t withdraw or "cash out" retirement contributions while still employed by the state. This means an alternate payee can’t either. According to state law, ERS cannot pay the alternate payee until they have an approved QDRO on file and the member either:
* retires and starts to receive a monthly payment;
* quits and takes a refund of their ERS retirement account; or
* passes away and the account becomes a payable death benefit to the estate and/or designated beneficiary(ies).
Questions about the divorce process?
QDROs are just one of many complicated aspects of the Texas divorce process. For general information about divorce in Texas, please check out the Varghese Summersett Family Law Group Blog and subscribe to our YouTube channel.
If you have not yet started the divorce process, please call us today at 817-900-3220 to schedule a consultation with an experienced Fort Worth divorce lawyer.