What is a DRO in a New York Divorce?

In a New York divorce, a Domestic Relations Order (DRO) is a crucial document used to divide retirement assets like pensions or 401(k) plans. A DRO directs the retirement plan administrator on how to properly distribute the benefits between the spouses without incurring early withdrawal penalties or taxes.

Without a DRO, even if a divorce agreement awards retirement assets to one spouse, the plan administrator cannot legally divide the account. The DRO must be carefully drafted to comply with both federal law and the specific rules of the retirement plan. Once approved by the court and the plan administrator, the DRO allows the non-employee spouse to receive their share directly.