Are qualified domestic relations orders or QDROs invalid because they do not specifically conform to the language of the final decree of the parties’ divorce?
No. According to Haney v. Haney, Record No. 1204-10-4 (Va. App. 2010), an unpublished case out of the Virginia Court of Appeals, in which the court summarily affirmed the decision of the Virginia Circuit that four qualified domestic relations orders (QDROs) entered by court were not invalid even though they included language concerning gains on wife’s portion of the marital share that did not appear the final decree of divorce. A Qualified Domestic Relations Order (QDRO) is a special type of order that is entered after the final decree of divorce and is used to distribute funds in a pension, deferred compensation, or retirement plan qualified under ERISA – the Employee’s Retirement Income Security Act of 1974 and the Internal Revenue Code. Although the Haney case does not directly involve a bankruptcy, retirement benefits, whether defined benefit plans like traditional pensions or defined contribution plans like the more typical 401(K) plans, are often one of the most valuable assets to be concerned about in bankruptcy and divorce cases. (Pensions, deferred compensation, and retirement plans are usually not included in, or are exempt from, the bankruptcy estate.)
In Haney, the parties were married for 16 years, separated for a year, and divorced the following year. In the final divorce decree, the Virginia Circuit Court equally divided the marital share of the husband’s retirement plans but did not expressly provide that wife would receive gains or losses on her share or award her interest in the plans as of a particular date. Following entry of the divorce decree, the wife’s divorce attorney prepared the QDROs to divide the retirement. The husband objected to entry of the QDROs prepared by wife’s divorce lawyer because they allowed passive gains and losses on the wife’s share of the retirement funds and transferred her share on a pro rata basis. The Virginia Circuit Court divorce judge entered the QDROs over husband’s objections and husband appealed.
In response to the husband’s arguments, the Court of Appeals cited the language of Virginia Code §20-107.3(K)(4), which states, “A trial court shall have the continuing authority and jurisdiction to make any additional orders necessary to effectuate and enforce any order entered pursuant to this section, including the authority to . . . modify any order . . . intended to affect or divide any pension, profit-sharing or deferred compensation plan or retirement benefits.” Normally, the Virginia Circuit Court loses jurisdiction over a final order or decree in a divorce case after twenty-one days after entry. The courts have continuing jurisdiction by this statute to enter orders pertaining to the distribution of retirement plans, which often must be submitted to and approved by the plan administrator in a lengthy process before entry by the court. In Haney, the Court of Appeals of Virginia held that since the final decree of divorce did not award the wife half of the marital share as of a particular date, then the interest that accrued on wife’s portion of the marital share belonged to wife. , citing Lewis v. Lewis, 53 Va. App. 528, 673 S.E.2d 888 (2009).
You should consult with your Virginia lawyer, or Glen Allen divorce lawyer James Wilson, concerning the equitable distribution of your pension, deferred compensation, or retirement benefits in a Virginia divorce case.