Qualified Domestic Relations Order (QDRO)

A QDRO is a legal order subsequent to a divorce or legal separation that splits and changes ownership of a retirement plan to give the divorced spouse his or her share of the asset. A certified copy of the divorce decree and QDRO must be received for review and approval by ERS' General Counsel. Benefits are payable to an alternate payee only if the order is determined to be a valid ERS QDRO.

Steps to submit a QDRO to ERS:
  1. Use the ERS QDRO model* as a guide. It is not complete as is. The QDRO must be consistent with the signed divorce decree or child support order.
  2. Get the QDRO signed by the judge who is exercising jurisdiction over the divorce or child support lawsuit.
  3. Have the original QDRO certified by the county clerk in the county in which the divorce was granted.
  4. Provide an original, certified copy of the QDRO and a copy of the divorce decree signed and dated by a judge.
*This model QDRO was developed by closely following the terms of Chapter 804 of the Texas Government Code, along with special QDRO administration rules developed by the ERS Board of Trustees at Title 34, Texas Administrative Code, Chapter 74.

Changes in the family relationship are the only circumstances in which a court can order a redirection of ERS retirement benefits. In other words, the law only allows ERS to pay retirement benefits to a person other than an ERS member or the member's designated beneficiary in the case of divorce or child support, and never in any other circumstances.

The special language that has to be in the ERS QDRO model is described in state law in Chapter 804 of the Texas Government Code. A QDRO for ERS retirement purposes has to have special language that is not found in other versions of QDROs for other retirement plans. Unlike private employers, ERS is expressly exempt from certain federal QDRO laws like the Employees Retirement Income Security Act (ERISA) or Section 414 of the IRS Code. Therefore, a QDRO that makes references to these laws will not be acceptable to ERS. Separate QDROs will be required by other retirement systems.

A state employee is not allowed to "cash out" retirement contributions while still employed by the state. Because a state employee can't "cash out" retirement contributions for their ERS retirement account, neither can an alternate payee, as a matter of law.

Therefore, the law strictly forbids any sort of immediate distribution of retirement contributions to the alternate payee. If the ERS member quits working for the state and then asks for a refund of contributions, the alternate payee would get a share of those contributions, but the law does not allow an alternate payee to dictate whether an ERS member withdraws ERS contributions or not. 

If you ever receive any retirement benefit through a QDRO as an alternate payee, that benefit will end upon your death. You cannot pass this benefit on to your children because the payments will not continue after you die, as a matter of law. In fact, if you die before your ex-spouse retires, you will receive nothing. This is a matter of statutory law that has withstood court challenge, and is different from the federal law that applies to private employers. 

The ERS retirement plan is a defined benefit plan. In other words, the amount of money that a member puts into the system bears no direct relationship to the amount of retirement benefits that the person will receive. Do not use the ERS retirement account balance or contribution amount as a gauge for a property settlement in a divorce unless you expect that the ERS member will withdraw the account balance. The ERS member cannot be ordered or forced by the QDRO into withdrawing their ERS account balance. Settlement calculations should be based on the actuarial value of the retirement annuity payable to the member, if any.
NOTE: ERS will not provide any actuarial valuations.

Also, because the ERS plan is a defined benefit plan, it is inappropriate and misleading to use member payroll contribution levels to calculate the community property share of the retirement interest. Instead, always use the ratio of service credit (in months, not days) accumulated during marriage divided by the total service credit (in months) accumulated up to divorce to calculate the community property interest. 

No. ERS is not your attorney and cannot advise you as to what you should do in your divorce. Any questions outside the scope of QDRO approval should be directed to your attorney.

The editorial staff of the State Bar Family Law Practice Manual publishes a QDRO form for state governmental plans. However, this form includes wording that is not specifically coordinated with ERS requirements, and its use risks our rejection if submitted without necessary changes. Therefore, we recommend that you use the ERS QDRO model. This assures you are using the language that ERS considers the most up-to-date and acceptable.