Summary:  During the 2009 - 2010 time period, more and more plan adminsitrators are beginning to charge "review" fees. Some of these are a rip-off.  Also the declining stock market is resulting in some dipsutes over QDRO plan values and the sharing of plan losses.

The Declining Stock Market and QDRO Plan Losses

In 2009 and 2010, the spouse who gets a portion of a retirement plan through a QDRO is disputing any share of plan losses on account of declining plan values.

This is particularly common when the QDRO has not been completed some months and even years after the divorce is final.

This is particularly true of 401(k) and similar accounts, which are usually heavily invested in the stock market.

Colorado law, as well the law in other states, is clear in that the allocation of gains and losses on a QDRO account is as of the date of the division.  No matter whether the QDRO has been done or not.

The date of the division is by agreement of the parties in the separation agreement.  If there is no listed date of division in the separation agreement, then the date that the Divorce Decree is signed by the Judge is the date of division.

See the page on the date of QDRO division and timing.

See also the following Texas court of appeals QDRO case, which includes the typical argument over who bears the losses after the date of the division when the QDRO has not been completed yet.  (It is the Alternate Payee.)

The New Procedure of Charging Plan "Review" Fees by Plan Administrators

A recent change in federal ERISA law allows retirement plan administrators to charge a fee for the review and/or processing of a QDRO.

Plan administrators have contracts with the employers.  In order to reduce the cost of adminstering the retirement plans, more and more fees are now being charged to the retirement plan accounts for the time to "review" a proposed QDRO.

I am seeing flat fees of $300 to $1,300.

I am also now seeing hourly charges at the rate of $200/hour.  In my opinion the hourly fee is a rip-off, espcially where the plan administrator does not publish a model QDRO.  In such a case, the "reviewer" issues a letter requesting some unusual non-standard QDRO provisions to my model QDROs. 

In reality, when hourly fees are charged to "review" and revise and "review" again the revision, the plan Participant and Alternate Payee are getting ripped off.

The bottom line now is that every QDRO should have a provision that states who will pay the "review" fee.  My model QDRO says that the Participant (plan owner) and the Alternate Payee (spouse who gets a QDRO account) will share equally in the administrator's fees.