Is Fidelity more Powerfull than the court
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I have a client who is about to be divorced and will have a divorce decree handend down from the court. It will have verbage that specifically outlines a rollover from my clients x husbands Retirement plan to her own IRA. I have spoken with a low man on the todem poll at the benefits department of his employer and he informed me of the inablity to rollover assets before the termination of the x husbands employment. However they will somehow seperate asstest in the plan to mark them for my cleints benefit. I firmly believe this is a ploy by fidleity to try to retain assets in the plan. I would love the opinion of legal counsel to the thought of fidelitys' ability to acually skirt around rolling out assets when they are specifically outlined to be rolled out when using the courts system, and a Qualified Domestic Relations Order.
Not an attorney but the rules are straightforward. A QDRO creates an alternate payee subject to the terms of the Plan. The alternate payee, your client, has the same rights as the participant in the Plan, no more, no less. Creating a QDRO does not create a special class of particpant in the Plan, just a type of participant subject to the same rules as every other participant.
If the Plan Participant cannot receive benefits until a separation from service via death, termination, retirement, the alternate payee cannot receive a distribution until one of those events occurs.
For free go the the EBSA portion of the DOL website and query for QDRO. Also, get a copy of the Plan document (that's one of the rights of the Participant) and read the sections on distributions to make sure there are no early withdrawal/retirement provisions. Finally, if you really want a legal opinion, get out your checkbook and engage a competent ERISA attorney.
And it isn't Fidelity, this is the way the regs are written, every 401(k) in the country lives by them. Blame the DOL if you want. Feel free to give them a call, I understand they are very sympatheic and understanding.