CDFA Module 3

monthly pension to each EE in retirement. It has no cash value today Retirement Equity Act of 1984 ANSWER- all qualified plans are subject to ERIS and may have assets segregated for benefit of an “alternate payee” through a court order known as a QDRO. What is a QDRO ANSWER- domestic relations order that recognizes the existence of an alternate payees right to receive all or a portion of benefits under pension plan What does a QDRO specify ANSWER- name and address of both parties (H and W); Amt/% of participants benefits to be paid to payee; Number of payments or period for which payments are requries What makes a QDRO “qualified” ANSWER- when it is approved by the qualified plan administrator What are the mandatory withholding rules from qualified plans ANSWER- provide clients with a direct rollover options; 20% mandatory withholding if the money isn’t directly paid to another plan or direct rollover; written rules need to be provided to the participants Rule of 72t ANSWER- a one time distribution from plan can occur and wife doesn’t have to pay a 10% tax penalty (still pays taxes) if done at the same time as rollover. What are the 3 methods of transferring an IRA ANSWER- 1. Change owner’s name on IRA 2. trustee-to-trustee transfer 3. rollover to new IRA person