The majority of American workers today are covered by either a defined contribution plan, such as a 401(k), or a defined benefit plan, which is the company pension. Suppose a man falls $5,000 in arrears in his child support payments, and has a 401(k) at XYZ Widgets. His former spouse can submit a QDRO to the pension plan administrator where the husband is employed “for the sole purpose” of providing the former spouse with the arrearage. Even though the participant is “not yet eligible to receive a distribution under the plan, most companies will provide the alternate payee under a defined contribution plan with an immediate distribution once the QDRO is approved.”

“In other words, in the vast majority of circumstances, she [the alternate payee] does not have to wait for her ex-husband to retire and she can get her $5,000 immediately upon approval of the QDRO.”

Obtaining past-due child support from a defined contribution plan is generally easier than doing so from a defined benefit plan. A child support QDRO can be prepared requiring the distribution of the entire arrearage in a single, lump-sum payment. On the other hand, obtaining past-due child support from a defined benefit plan is more difficult because there are no individual accounts – no “pot of money” – to tap. Unlike the defined contribution plan at XYZ Widgets, the defined benefit plan at ABC Services may only permit a “share payment” QDRO, by which the child support arrearage is reduced on a monthly basis.

There is no limit to the number of QDROs that a person may submit to the plan administrator, especially if there is past-due child support. For example, suppose the former spouse who fell $5,000 in arrears and caught up with a payment from his defined contribution plan at XYZ Widgets falls behind again. His former wife has the right to repeat the process.

Some retirement plans work better than others, according to QDRO lawyers. Generally, most defined contribution plans such as 401(k), profit-sharing, employee stock ownership plans (ESOP), and 403(b) plans work very well for obtaining past-due child support or maintenance payments. Unlike many defined benefit plans (traditional pensions), defined contribution plans allow lump-sum distributions. However, for procuring current (that is, prospective monthly) child support payments, a defined benefit plan may be the better alternative because child support is usually expressed as a monthly amount, just as benefits are normally paid monthly.

So, if the retirement plan in question is a defined benefit plan that allows preretirement distributions, then it will be an easier fit with a QDRO for future child support payments.