A QDRO that creates a “separate-interest” divides the participant’s pension benefits into two separate portions with the intent of giving the alternate payee a separate right to receive a portion of the pension retirement benefit to be paid at a time and in a form different from that chosen by the alternate payee (other than a joint and survivor annuity) allowed by the plan.
A QDRO that uses a “shared-payment” approach splits the benefit payments from the pension plan between the participant and the alternate payee. The alternate payee receives pension payments under this approach only when the participant receives pension payments or is already in pay status. This type of arrangement gives the participant absolute control over the timing and form of pension payment. In splitting the payments, the QDRO may award the alternate payee either a percentage or a dollar amount of each of the participant’s pension payments.