What Is A Domestic Relations Order (DRO) And How Does It Affect PERA In Minnesota?

In this article, you can discover…

• The role of a PERA domestic relations order (DRO) in Minnesota divorces.
• Whether a PERA DRO could impact survivor benefit elections.
• Common drafting errors that can cause delays or denials of a Pera DRO.

What Is A Domestic Relations Order (DRO), And When Is It Used In Divorce Cases?

If one of the parties who is divorcing has a Public Employees Retirement Association (PERA) retirement account, they’ve usually been contributing to it for a while. If the party has a vested interest in that account, and they have contributed to it during the marriage, both parties have an interest in that account. That account has retirement benefits, along with a few other benefits. A domestic relations order (DRO) is used to tell PERA how to divide the PERA benefits after a divorce.

How Does A PERA DRO Differ From A Qualified Domestic Relations Order (QDRO) Used For Private Retirement Plans?

A QDRO is used to divide retirement assets that are governed by federal laws and ERISA, such as a 401(k). PERA DROs, however, relate to assets that fall under the jurisdiction of the state government, i.e., public employment retirement plans. The Q in the QDRO stands for qualified which has a certain meaning under the federal laws pertaining to retirement accounts. The PERA account is not a qualified account under those laws, and again, is a creature of State law.

Does A DRO Affecting PERA Benefits Also Impact Survivor Benefit Elections?

Yes, a DRO that impacts PERA benefits can also impact survivor benefits. There are a number of different ways that survivor benefits can be allocated, and those need to be established at the time of your divorce.

Depending on your family’s needs, there are a number of different ways that we can ensure accounts will benefit survivors once you pass away. This is where it is best to work with an experienced family law attorney.

What Common Drafting Errors Can Cause Delays Or Denial Of A PERA Domestic Relations Order?

I’ve seen instances where one party’s attorney wants to structure a DRO in a way that the retirement plan will simply not allow. If this happens, the DRO is likely to be denied by PERA, leading to sometimes serious delays. A DRO must be structured in ways that will be approved by the Court, by PERA and are workable for the parties.

Why Is Experienced Legal Drafting Essential When Preparing A DRO For PERA Division?

Experienced legal drafting is so important because there are a number of benefits at stake. There are multiple ways that DROs can be drafted, but the orders must also align with what the retirement plan allows. Drafting DROs can be a bit like splitting atoms, and a skilled, experienced, and careful family law attorney will be needed to draft it correctly.

Still Have Questions? Ready To Get Started?

For more information on domestic relations orders for PERA in Minnesota, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (763) 270-1571 today.