When going to through the QDRO process, one of the first questions our customers ask is “How fast can I get my money?”. It is a valid question that has a simple answer: it depends. On average (assuming everything is running smoothly), the QDRO process can be completed in 60-120 days. Sometimes, it can be completed in as little as 30 days, and sometimes, it can take MUCH longer. BUT, that doesn’t necessarily mean that you will have access to funds at that time. It may sound frustrating, but with the unique nature of each specific retirement plan, the answer really depends on a number of factors.

The most significant factor impacting how fast you can access your money is the type of plan being divided. For example, are you dividing a Defined Contribution Plan (such as a 401(k)), a Defined Benefit Plan (such as a Traditional Pension) or a Hybrid Plan (such as a Cash-Balance Pension Plan or a Money Purchase Pension Plan)?

If you are dividing a Defined Contribution Plan, then the likelihood is that you will be able to access your awarded funds once they are transferred into your name – unless the particular plan has additional restrictions. In the case of a Defined Contribution Plan (such as a 401(k)), and assuming there are no issues with the entry of the QDRO and processing by the Plan Administrator, you will likely have access to your awarded funds in 60-120 days.

If, on the other hand, you are dividing a Defined Benefit Plan, then you will likely not have access to any of the awarded benefits until either the time that the Participant attains the earliest retirement age under the plan (regardless of whether they continue to work), or the date that the Participant actually retires and begins receiving benefits. Which date applies will depend on the language of your QDRO and your divorce judgment.

A Hybrid Plan (such as a Cash-Balance Pension Plan) may allow you to take a lump sum distribution of your awarded benefits, but require you to wait until one of the triggering dates for a traditional pension.

The type of plan being divided can have a significant impact on how fast you can access your money. Understanding the rules of the plan you are trying to divide is critical to determining how long the process will take and when you will have money in hand. In many cases, we have encountered customers that are relying on the promise of immediate access to retirement funds, only to discover that they must wait until their spouse or former spouse actually retires – which might be several years in the future.

Contacting the Plan Administrator for the retirement plan being divided ahead of time will significantly help you understand the rules of the plan and set reasonable expectations for moving forward.