Plan Administrator received a draft DRO. Before DRO was finalized and signed by a judge, the participant's employer (i.e., PA) received a state withholding notice for child support because the participant's ex-husband (alternate payee under DRO) owes back child support. The withholding order doesn't specify the plan name, so it will be denied and probably re-submitted. When the PA gets a corrected withholding order specifying the plan name, it will be deemed qualified, and when the draft DRO is signed by a judge, the PA will now have 2 separate QDROs. Neither the DRO nor the withholding order indicates that the amount awarded under the DRO can be offset by the amount specified in the withholding order. So, PA is assuming that participant's account balance will have to be reduced by the amounts specified in BOTH DROs (yes, there is enough in her AB to cover both). Is PA's assumption correct? Thoughts?

"Withholding notice"? Is anyone confusing garnishment with QDRO?

No, it's an income withholding notice for non-employer payor from the state's department of social services, child support enforcement division. The PA is treating it as a domestic relations order per ERISA Opinion Letter 2001-06A. Do you think the withholding notice could be viewed as a "garnishment" of the amount awarded to the alternate payee under the other DRO (i.e., an offset), even though the withholding notice doesn't mention the other DRO?

Just had an update from the PA. The DFS withholding notice is intended to attach to the amount awarded under the DRO, rather than becoming a separate DRO itself. Does the DFS withholding notice have to specifically state that the proceeds come out of what's awarded under the DRO? Right now it just has vague wording about any amounts payable.

If the agency withholding notice is simply a garnishment (which is how is has been most recently described), I don't think the plan administrator can give it any effect, so its details don't matter. You are correct to consider whether or not it is a domestic relations order.

Thanks QDROphile. It does appear to be a type of garnishment. However, if the DFS withholding notice were to be revised to specifically state that it offsets the proceeds from the DRO and if it satisfies all other DRO requirements, then the PA would, in effect, have a DRO that offsets another DRO. Is that possible? What about the fact that the ex-husband alternate payee could choose to r/o the entire amount awarded under the first DRO which would leave $0 from which to take the child support $$?

Look at section 414(p)(3)© of the Internal Revenue Code.