What is a DRO?
Posted on Apr 3, 2020 8:20am PDT
Q. Jeanine M. of Michigan wants to know: "What is a DRO?"
A. Evan, from the QDRO Department of Pension Evaluators & QDROS Of
Troyan, Inc Associates Group responds: "A "DRO" is an acronym for Domestic Relations Order. A DRO is
a court order that requires a retirement plan or plan participant to pay
a portion of the retirement benefits of an employee or retiree (who is
called the "participant") to the participant's spouse, former
spouse, and/or dependent children (who are each called an "alternate
payee"). In other words, DROs are similar to QDROs as described above,
except DROs apply to non-qualified deferred compensation plans (for example,
stock options) and retirement plans which are only provided to executives
of corporations. Also, the tax effects of a QDRO (as described above)
do not usually apply to DROs."
Evan Edelstein
Lead QDRO Analyst
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