If you and your spouse divorce while one or both of you is vested in a public or private retirement plan, 401(k) plan, Profit Sharing Plan, Employee Stock Ownership Plan, Keogh or Tax Sheltered Annuity (called simply “retirement plans” here) AND you have agreed to divide one or more of those retirement plans between you, you will often need what is called a Qualified Domestic Relations Order (QDRO) (kwa-dro) to divide each plan. A normal divorce judgment cannot accomplish that division because the pension plan is not a party to your divorce. The divorce court has no jurisdiction over the plan, so the court can’t order the plan to do anything.
If one of you has a public retirement plan (state, federal or military – including CalPERS, CalSTRS, UCRS, CSRS and FERS), the additional court order required is called just a Domestic Relations Order (DRO), different but similar to a QDRO.
You can determine easily whether your particular retirement plan requires a QDRO or DRO to divide by contacting the plan administrator and simply asking if you need one of these types of court order to divide the plan.
The first thing to understand is that if one or both of you are vested in a retirement plan but you are NOT going to divide any of those plans or assign one spouse’s retirement plan to the other spouse, this doesn’t affect you. So if you are vested in a plan and you and your spouse have agreed that you will get all of that plan in which you are vested and/or your spouse is vested in a plan and you and your spouse have agreed that your spouse will get all of that plan in which he or she is vested, then all you will need is your divorce judgment because you are not legally dividing any plan. The employee spouse who is vested in each plan is the spouse who will receive all future benefits of that plan, including any survivor’s benefits payable at the death of the vested spouse. You won’t need a QDRO or DRO. A divorce judgment can state that an entire retirement plan is awarded to either one of you, providing that spouse is the employee spouse or participating spouse. It cannot divide a retirement plan between you or award the employee spouse’s vested plan to the non-employee spouse.
The second thing to understand is that this does not affect IRA’s (including Roth IRA’s) at all. IRA’s are not true retirement plans. They can be divided by a divorce judgment.
Thirdly, this has nothing to do with Social Security benefits. They are personal benefits governed by federal law. They are not community property to begin with.