Retirement Equity Act and QDRO Quiz

Which information must be included in a Qualified Domestic Relations Order (QDRO) according to section 414(p) of the Internal Revenue Code?

The amount or percentage to be transferred without calculations or formulas (correct)
The age of the participant and alternate payee
The participant's social security number and alternate payee's driver's license number
The gender of the participant and alternate payee

What is the purpose of a Qualified Domestic Relations Order (QDRO) in relation to retirement plans?

To recognize the rights of an alternate payee to receive all of the participant's plan benefits
To ensure that the participant's plan benefits are exclusively for the participant
To transfer the tax liability to an alternate payee
To create the rights of an alternate payee to receive a portion of the participant's plan benefits (correct)

Under what conditions can a QDRO be incorporated within a divorce decree or other judgment?

When it contains calculations and formulas for the transfer amount
When it includes the last known address of the participant and alternate payee
When the alternate payee is a child of the participant
When it does not violate either the law or the plan provisions (correct)

What does a Qualified Domestic Relations Order (QDRO) allow for?

Transfer of certain retirement plans and tax liability to an alternate payee (D) Signup and view all the answers

What does a QDRO need to contain according to section 414(p) of the Internal Revenue Code?

Name and last known address of the participant and alternate payee, AIG Retirement Services/VALIC plan(s) or account number(s) to be transferred, and amount or percentage to be transferred (no calculations or formulas) (B) Signup and view all the answers

Who may be an alternate payee in a Qualified Domestic Relations Order (QDRO)?

Spouse, former spouse, child, or other dependent of a participant (A) Signup and view all the answers

What type of order can a Qualified Domestic Relations Order (QDRO) be?

Either a separate court order or it can be incorporated within a divorce decree or other judgment (C) Signup and view all the answers

What did the correction to the Retirement Equity Act (REA) of 1984 do?

Extended QDRO rules to include 403(b) annuities (D) Signup and view all the answers

Under what circumstances can a QDRO ask AIG Retirement Services/VALIC?

It cannot ask AIG Retirement Services/VALIC to violate either the law or the plan provisions. (C) Signup and view all the answers

'A QDRO is a domestic relations order which creates or recognizes...' What does it recognize?

'...the rights of an alternate payee to receive all or a portion of a participant's plan benefits.' (B) Signup and view all the answers

'A QDRO must contain the name and last known address...' Who should these pertain to?

'...of the participant and alternate payee.' (B) Signup and view all the answers

What is the purpose of section 414(p) of the Internal Revenue Code in relation to QDROs?

To outline specific QDRO requirements (D) Signup and view all the answers

What does a Qualified Domestic Relations Order (QDRO) create or recognize?

The rights of an alternate payee to receive all or a portion of a participant's plan benefits. (B) Signup and view all the answers

What type of plan does NOT fall under the QDRO rules?

IRA (B) Signup and view all the answers

Under what circumstances can a NQDA account be transferred between spouses?

Without tax consequences (B) Signup and view all the answers

What is the requirement for transfer of funds between spouses regarding NQDA accounts?

Notarized statement from the client (B) Signup and view all the answers

What is technically incorrect regarding the NQDA and QDROs?

QDROs are limited to qualified plans only (C) Signup and view all the answers

In what situation is a QDRO not applicable?

Transferring ownership of NQDA accounts (B) Signup and view all the answers

What is the significance of the '18-Month Hold' according to the IRS regulations?

It places the participant's account on hold until the 18-month period has expired. (C) Signup and view all the answers

In relation to Qualified Plans, how are alternate payees treated with respect to the 10% early withdrawal penalty tax?

They are exempt from the 10% early withdrawal penalty tax if the distribution is made directly from a qualified plan. (B) Signup and view all the answers

What happens to any basis that the original owner had in an IRA when it is transferred to a former spouse's IRA?

The basis is transferred to the former spouse's IRA and becomes taxable upon withdrawal. (D) Signup and view all the answers

What does a transfer/rollover of an individual’s interest in an IRA to a new or existing traditional IRA held in the name of the former spouse pursuant to a valid divorce decree result in?

It results in a non-taxable transfer without any potential tax liabilities. (A) Signup and view all the answers

What is the purpose of a QDRO 'hold' placed by AIG Retirement Services/VALIC?

It prevents any withdrawals or distributions from the participant's account until further communication is received. (C) Signup and view all the answers