Most Companies Pay QDRO Fees

February 8, 2005 (PLANSPONSOR.com) - Companies are more likely to pay fees for qualified domestic relations orders (QDRO) rather than dip into retirement plan assets for that expense, according to a new survey.

A news release from the Profit Sharing/401k Council of America said its latest QDRO fee poll found that 55.3% of responding companies dipped into corporate assets while 43.7% used plan assets and the remaining 1% split between the two. The group surveyed 103 profit sharing and k plans.

Among the larger plans (1,000 workers and above), the spread was even greater among those respondents using company accounts and those turning to plan assets. Some 33.3% of companies with 1,000 to 4,999 employees used plan assets versus 66.7% who relied on corporate funds while four in 10 companies with 5,000 or more workers used plan assets and 56% dipped into company money.

The announcement said that in nearly three quarters of the plans surveyed (73.9%), the participant affected by the QDRO paid the fee while all participants in the remaining plans picked up the tab. In the largest plans, the trend toward having all participants make the payments was the most pronounced with 36.4% turning to the individual participant while the remaining 63.6% spread it out among everyone in the plan.

Further, four in 10 respondents said they allow the individuals affected by the QDRO to split the fee with an alternate payee. Just over a third (34.3%) said they used a specialized service provider to help service their QDROs.

Among the responding plans, the median QDRO fee was $400 and ranged from $750 in the smallest plans to $568 at the largest plans.

The survey is at http://www.psca.org/pdfs/qdro2005.asp . A free registration is required.

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