23 Questions
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
What is the purpose of a Qualified Domestic Relations Order (QDRO) in relation to retirement plans?
To create the rights of an alternate payee to receive a portion of the participant's plan benefits
Under what conditions can a QDRO be incorporated within a divorce decree or other judgment?
When it does not violate either the law or the plan provisions
What does a Qualified Domestic Relations Order (QDRO) allow for?
Transfer of certain retirement plans and tax liability to an alternate payee
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)
Who may be an alternate payee in a Qualified Domestic Relations Order (QDRO)?
Spouse, former spouse, child, or other dependent of a participant
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
What did the correction to the Retirement Equity Act (REA) of 1984 do?
Extended QDRO rules to include 403(b) annuities
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.
'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.'
'A QDRO must contain the name and last known address...' Who should these pertain to?
'...of the participant and alternate payee.'
What is the purpose of section 414(p) of the Internal Revenue Code in relation to QDROs?
To outline specific QDRO requirements
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.
What type of plan does NOT fall under the QDRO rules?
IRA
Under what circumstances can a NQDA account be transferred between spouses?
Without tax consequences
What is the requirement for transfer of funds between spouses regarding NQDA accounts?
Notarized statement from the client
What is technically incorrect regarding the NQDA and QDROs?
QDROs are limited to qualified plans only
In what situation is a QDRO not applicable?
Transferring ownership of NQDA accounts
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.
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.
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.
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.
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.
Test your knowledge about the Retirement Equity Act of 1984 and the Qualified Domestic Relations Order (QDRO) rules, which were extended to include 403(b) annuities. Learn about the specific QDRO requirements outlined in section 414(p) of the Internal Revenue Code.
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