When Does a Nonemployee Spouse Have a Right to the Employee's Retirement Accumulation?

Retirement accumulations in employer-sponsored qualified plans often represent the principal source of liquid resources for an employee and his or her family. In every state, the non-employee spouse has an interest in the employee's retirement fund, which is usually determined through the judgment of a state court either approving a negotiated settlement or ordering a division of the spouse's marital property. That judgment can then be enforced against the plan as a qualified domestic relations order (QDRO). Usually, when the employee spouse has interests in multiple plans ' a not infrequent situation as the employee benefit landscape shifts in response to economic pressures ' the divorce settlement will also contain a waiver or release by the non-employee spouse of his or her interests in other plans. As we have learned, such a waiver or release, even if effective under state law, does not, by itself, protect the employee's interests and those of the employee's successors.