Under this approach, the alternate payee will not receive any payments unless the participant receives a payment or is already in pay status.
This approach is often used when a support order is being drafted after a participant has already begun to receive a stream of payments from the plan (such as a life annuity).
One approach that is used in some orders is to split the actual benefit payments made with respect to a participant under the plan to give the alternate payee part of each payment.
This approach to dividing retirement benefits is often called the shared payment approach.
A defined benefit plan promises to pay each participant a specific benefit at retirement.
Reference: ERISA §§ 206(d)(3)(B)(i)(I), 206(d)(3)(D), 206(d)(3)(E); IRC §§ 414(p)(1)(A)(i), 414(p)(3), 414(p)(4) Generally, QDROs are used either to provide support payments (temporary or permanent) to the alternate payee (who may be the spouse, former spouse or a child or other dependent of the participant) or to divide marital property in the course of dissolving a marriage.An order providing for shared payments, like any other QDRO, must specify the amount or percentage of the participant's benefit payments that is assigned to the alternate payee (or the manner in which such amount or percentage is to be determined).It must also specify the number of payments or period to which it applies.In deciding how to divide a participant's pension benefits in a QDRO, it is also important to consider two aspects of a participant's pension benefits: the benefit payable under the plan directly to the participant for retirement purposes (referred to here as the retirement benefit), and any benefit that is payable under the plan on behalf of the participant to someone else after the participant dies (referred to here as the survivor benefit).These two aspects of a participant's pension benefits are discussed separately in this booklet only in order to emphasize the importance of considering how best to divide pension benefits.