A QDRO (pronounced as “qua-dro”) is a type of domestic relations order usually issued in divorce cases. During a divorce or legal separation, a QDRO splits a retirement or pension plan by recognizing joint martial ownership interest in the plan, especially each spouse's individual interest in his or her share of the assets. A domestic relations order is any judgment or order (including approval of a property settlement agreement) which (1) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent, and (2) is made pursuant to a State domestic relations law.
The Qualified Domestic Relations Order awards part of the employee's pension/retirement plan to someone called an alternative payee. A QDRO creates or recognizes an alternate payee's right to receive all or a portion of the benefits payable with respect to a participant under a qualified Plan (i.e. employer sponsored).