In the past, divorcing spouses who wanted to transfer retirement plan money using a Qualified Domestic Relations Order (QDRO) faced the prospect of a significant attorney’s fee (typically $500-$1,000 for the QDRO for a defined contribution plan like a 401k plan and $1,000-$2,000 for a defined benefit plan like a pension). Now the Bush Administration (the Department of Labor and Internal Revenue Service) has added another cost. As a result of changes in interpretation of federal regulations, employers can now charge participants an allocated cost for processing a QDRO.
I’ve not heard anyone estimate what this fee would likely be. As soon as I have a general idea, I’ll post it here on the blog.