For QDRO's, is it required to create separate plan accounts or can we leave everything in the participant's account and separate when payments commence?

Thanks.

OK if you can handle the accounting properly to meet the requirements of the order. Setting up a subaccount is usually a lot cleaner and is easier to explain if you ever have to defend.

The plan should also have set QDRO procedures in place that addresses how the plan sponsor handles the QDRO. From getting it as a DRO and determining it is a qualified DRO all the way down to how the division will occur. All of the ones I have seen have required a separate account even if the alternate payee was going to take an immediate distribution. Makes it easier to track and report.

I prefer NOT to set up a separate account if there is going to be an immediate distribution to the Alternate Payee.

For defined contribution plans with participant directed investments, I require a separate account for the alternate payee unless the QDRO provides for an immediate lump sum distribution. Same deal for pooled funds if earnings are to be credited to alternate payee's award so as not to have to deal with accounting for earnings on future contributions allocated to participant.

Probably very obvious, but a separate account may make it easier to send a correct 1099 to the alternate payee.