Model Settlement Agreement Language for Definded Contribution Plans

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Model Settlement Agreement Language for Defined Contribution Plans

Instructions for Preparing Agreement Language

ATTENTION: In the following Model Separation Agreement for a Defined Contribution Plan, the Plaintiff is the Participant and the Defendant is the Alternate Payee. (You must insert the correct designations - Example: Plaintiff, Petitioner, Complainant, Defendant or Respondent). There are 9 model clauses in total.

View Sample Defined Contribution Agreement Language (PDF)

Retirement Benefits of Plaintiff

Plaintiff is a Participant under the [Insert Exact Name of Plan] (hereinafter referred to as Plan). Through a Qualified Domestic Relations Order “QDRO”, Defendant is hereby granted a portion of the Plaintiff’s retirement benefits under the Plan as specified below.

AMOUNT OF AWARD (Clause #1)

If a PERCENT AMOUNT is being Awarded (choose an option)

Option 1: Percent as of a Date: (choose either A,B,C,D or E)

Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the Plaintiff’s Total Account Balance accumulated under the Plan

A. - as of [insert the Marriage End Date], or the closest Plan valuation date thereto (the “Assignment Date”).
B. - as of the Date the Order is approved as a Qualified Domestic Relations Order by the Plan Administrator or the closest Plan valuation date thereto (the “Assignment Date”).

C. - as of the Date the award is segregated from Participant’s account or the closest Plan valuation date thereto (the “Assignment Date”).

D. – equal to [(a) MINUS (b)] below, where

(a) equals the Plaintiff’s Total Account Balance accumulated under the Plan as of [Insert the Date the Marriage Ended] or the closest Plan valuation date thereto (the “Assignment Date”);

(b) equals the Plaintiff’s Total Account Balance accumulated under the Plan as of [Insert the Date of Marriage] (or the closest Plan valuation date thereto), and INCLUDING any and all investment earnings/losses that are attributable to such "pre-marital" account balance which have accrued during the marriage from [Insert the Date of Marriage] to [Insert the Date the Marriage Ended].

Option 2: Percent as of a Date PLUS a Dollar Amount: (choose either A,B,C,D or E)

Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the Plaintiff’s Total Account Balance accumulated under the Plan

A. - as of [insert the Marriage End Date] or the closest Plan valuation date thereto (the “Assignment Date”) PLUS [Insert $ Amount].

B. - as of [insert a Specific Date], or the closest Plan valuation date thereto (the “Assignment Date”) PLUS [Insert $ Amount].

C. - as of the Date the Order is approved as a Qualified Domestic Relations Order by the Plan Administrator, or the closest Plan valuation date thereto (the “Assignment Date”) PLUS [Insert $ Amount].

D. - as of the Date the award is segregated from Participant’s account, or the closest Plan valuation date thereto (the “Assignment Date”) PLUS [Insert $ Amount].

E. - equal to the sum of [(1.) PLUS (2.)] below, where

(1.) is equal to (a) MINUS (b)] below,

(a) equals the Plaintiff’s Total Account Balance accumulated under the Plan as of [Insert the Date the Marriage Ended], or the closest Plan valuation date thereto (the “Assignment Date”);

(b) equals the Plaintiff’s Total Account Balance accumulated under the Plan as of [Insert the Date of Marriage] (or the closest Plan valuation date thereto), and INCLUDING any and all investment earnings/losses that are attributable to such "pre-marital" account balance which have accrued during the marriage from [Insert the Date of Marriage] to [Insert the Date the Marriage Ended].

(2.) is equal to [Insert $ Amount].

Option 3: Percent as of a Date MINUS a Dollar Amount: (choose either A,B,C,D or E)

Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert % Amount] Percent of the Plaintiff’s Total Account Balance accumulated under the Plan

A. - as of [insert the Marriage End Date], or the closest Plan valuation date thereto (the “Assignment Date”) MINUS [Insert $ Amount].

B. - as of [insert a Specific Date], or the closest Plan valuation date thereto (the “Assignment Date”) MINUS [Insert $ Amount].

C. - as of the Date the Order is approved as a Qualified Domestic Relations Order by the Plan Administrator, or the closest Plan valuation date thereto (the “Assignment Date”) MINUS [Insert $ Amount].

D. - as of the Date the award is segregated from Participant’s account, or the closest Plan valuation date thereto (the “Assignment Date”) MINUS [Insert $ Amount].

E. - equal to the sum of [(1.) MINUS (2.)] below, where

(1.) is equal to (a) MINUS (b)] below,

(a) equals the Plaintiff’s Total Account Balance accumulated under the Plan as of [Insert the Date the Marriage Ended], or the closest Plan valuation date thereto (the “Assignment Date”);

(b) equals the Plaintiff’s Total Account Balance accumulated under the Plan as of [Insert the Date of Marriage] (or the closest Plan valuation date thereto), and INCLUDING any and all investment earnings/losses that are attributable to such "pre-marital" account balance which have accrued during the marriage from [Insert the Date of Marriage] to [Insert the Date the Marriage Ended].

(2.) is equal to [Insert $ Amount].

Option 4: Percent as of a Date AFTER a Dollar Amount is Deducted: (choose either A,B,or C)

Amount of Defendant’s Benefit: After deducting [Insert $ Amount] from Defendant’s Total Account Balance accumulated under the Plan

A. - as of [insert the Marriage End Date], or the closest Plan valuation date thereto (the “Assignment Date”), the Plaintiff will be assigned an amount equal to [Insert % Amount] of Defendant’s remaining Total Account Balance accumulated under the Plan as of [insert the Marriage End Date].

B. - as of [insert a Specific Date], or the closest Plan valuation date thereto (the “Assignment Date”), the Plaintiff will be assigned an amount equal to [Insert % Amount] of Defendant’s remaining Total Account Balance accumulated under the Plan as of [insert a Specific Date].

C. - as of the Date the Order is approved as a Qualified Domestic Relations Order by the Plan Administrator, or the closest Plan valuation date thereto (the “Assignment Date”), the Plaintiff will be assigned an amount equal to [Insert % Amount] of Defendant’s remaining Total Account Balance accumulated under the Plan.

If a DOLLAR AMOUNT is being Awarded (choose either A,B,or C)

Amount of Defendant’s Benefit: The Defendant will be assigned an amount equal to [Insert $ Amount] of the Plaintiff’s Total Account Balance accumulated under the Plan

A. - as of [insert the Marriage End Date], or the closest Plan valuation date thereto (the “Assignment Date”).

B. - as of [insert a Specific Date], or the closest Plan valuation date thereto (the “Assignment Date”).

C. - as of the Date the Order is approved as a Qualified Domestic Relations Order by the Plan Administrator, or the closest Plan valuation date thereto (the “Assignment Date”).

INVESTMENT EARNINGS (Clause #2)

Investment Earnings: The Defendant’s assigned share of the benefits as set forth above SHALL [insert either ALSO or NOT] bear any interest and investment earnings or losses attributable thereon for periods subsequent to the "Assignment Date," or the closest Plan valuation date thereto, until the date the Plan actually establishes a separate account(s) for the Defendant (the "Segregation Date").

OUTSTANDING LOANS (Clause #3)

Outstanding Loan Balance: In the event the Plaintiff has an outstanding loan balance as of the Assignment Date, Defendant’s award is to be calculated [insert either BEFORE or AFTER] the loan amount is subtracted from Plaintiff’s total account balance. Therefore, Defendant’s share of the benefits [insert either SHALL BE or SHALL NOT BE] impacted or reduced by any loans taken be the Plaintiff.

AWARD DETERMINED FROM ALL ACCOUNTS (Clause #4)

Allocation of Award: Defendant’s award shall be allocated on a “pro-rata” basis from all of Plaintiff’s different accounts and investment funds.

DEATH OF PLAINTIFF (Clause #5)

Death of Plaintiff: The Defendant will be treated as a surviving spouse of the Plaintiff, if the Plaintiff dies before the Defendant’s award is segregated into a separate account.

DEATH OF DEFENDANT (Clause #6)

Death of Defendant: If the Defendant dies before the award is segregated into a separate account, the award shall devolve to Defendant’s designated beneficiaries or estate.

PLAN ADMINISTRATOR FEES (Clause #7)

Plan Administrator Fees: Any QDRO processing or reviewing fees charged by the Plan Administrator shall be deducted [Choose Option A, B or C]

A. - equally from Defendant’s and Plaintiff’s share of the retirement benefits.

B. - from Defendant’s share of the retirement benefits.

C. - from Plaintiff’s share of the retirement benefits.

PROCESSING QDRO (Clause #8)

Processing The Qualified Domestic Relations Order: Defendant’s Attorney will be responsible of preparing, submitting and overseeing the approval of the QDRO until its final acceptance by the plan administrator as a QDRO. It is understood that Defendant’s Attorney may employ a QDRO drafting company to assist in the preparation and submission of the Order to the plan administrator for approval as a QDRO.

DISTRIBUTION OF FUNDS (Clause #9)

Distribution of Funds: Defendant’s award will be segregated into a separate account in the name of the Defendant when the Plan Administrator approves the QDRO. It is understood that it will be the Defendant’s responsibility to instruct the Plan Administrator as to investment election(s) or distribution of this account.