Division of Retirement Benefits

Retirement benefits may be community property, separate property or a little of both. The classification depends upon the time of vesting.

Like any other asset in a divorce, retirement accounts must be divided.  Essentially any retirement benefits acquired or vested during the marriage belong to the community.   Likewise, any benefits acquired before the marriage are considered separate.

Under New Mexico community property laws, the only issue to be determined is when the benefits vested.   This is typically readily determined by contacting the plan administrator or going over the statements associated with the benefits.

Seems simple enough but in fact, the division of retirement benefits are often very hotly disputed in a divorce.  Because the retirement benefits can be the most valuable asset one or both of the spouses possess, it is very important to understand the law regarding the division of retirement benefits so that you receive your fair share of those benefits.

The Albuquerque law firm of Collins & Collins, P.C. can help.  We have extensive experience in New Mexico divorce and family law that will benefit you during this difficult process.  Contact us online or give us a call at (505) 242-5958.

Court Order Required for Divisions of of Retirement Benefits

A QDRO must be submitted to the plan administrator.  Most plans have specific and strict requirements regarding the form and content of the QDRO.  This may mean that the QDRO must be submitted more than once prior to approval.

In order to divide retirement benefits, a Qualified Domestic Relations Order (QDRO) must be filed with the court and then forwarded to the plan administrator.  Most plans will have their own form of QDRO.  The administrator’s requirements must be followed exactly or the Order will be refused.

Submission and approval of the QDRO can be a rather tedious process as some plan administrators require the Order be filed and signed by the judge before they will review it to determine whether it meets their requirements.  If it is refused, the QDRO must be modified, refiled with the Court and signed by the judge again.  Then the QDRO must be resubmitted to the administrator beginning the cycle anew.

Court Intervention Often Required to Calculate the QDRO

The parties often will not agree on the form or the contents of the QDRO requiring the judge to decide.  However, the plan administrator, not the judge, determines whether the QDRO will be finally accepted.

Like any other issue related to the divorce and division of assets, the parties often do not agree on the terms of the division of retirement benefits or the essential terms of the QDRO.  The process is made significantly more complicated when the parties cannot agree on the terms to be put in the QDRO.

In those cases where the parties cannot agree on the terms of the QDRO, the Court’s intervention and direction is required.  Yet even then, the QDRO may take a couple of submissions and modifications prior to approval by the Plan Administrator and final division of the benefits between the parties.

This is so because the final decision to accept the QDRO belongs the QDRO plan administrator. The Court can help set the terms of the division but cannot dictate the presentation or form of the QDRO to be accepted by the administrator.

Plan Administrator Will Review Form of QDRO, Not the Substance

It is possible that the QDRO will meet the plan’s requirements for filing yet still be erroneously calculated. It is up the parties to get the division correct.

It is important to recognize that the plan administrator is looking to make sure the form submitted meets the plan’s technical requirements.  The administrator will not look to the substance.

In other words, it is up the parties, and their lawyers if they have them, to determine the proper dates and amounts into the QDRO.  As they say, garbage in, garbage out.  It is possible that the QDRO will meet the plan’s requirements for filing yet still be erroneously calculated.

Seek Legal Guidance

Because of the all the challenges and complexities of the QDRO, it is important to seek legal guidance.  If you cannot afford an attorney and a QDRO is necessary, then obtain the form of QDRO from the plan administrator and study the requirements carefully to insure that what you and your ex submit get it right.

Just as importantly, make sure you understand the rules regarding community property in New Mexico so that the final division of retirement accounts upon acceptance by the plan if fair to you under the law.

Because of the complexities and challenges of the QDRO, it is advisable to seek the guidance of an experienced New Mexico divorce attorney.

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