A plan document sponsored by a governmental entity provides that a distribution under a QDRO is limited to funds from some sources (PSP) and that no QDRO distribution may be made from others (Match). The plan has been presented with a QDRO awarding 50% of the entire account balance to the alternate payee. Is the Plan permitted to require amendment of the QDRO such that certain assets in the Plan are sheltered from the reach of a valid court order? If so, on what basis? I understand that a plan may restrict the timing and form of a distribution, but I have never encountered a situation where plan assets are excluded from consideration altogether.

Public employers are not subject to the QDRO provisions because the exception under the non alienation provison of the IRC which permit QDROs does not apply to public employers. Under IRC 414(p)(11) a public employer can choose whether to honor a DRO and if the DRO is certified as a QDRO the transfer will receive the same tax benefits as a QDRO under an ERISA plan. A gov plan can reject a DRO which requires payment of a benefit not provided under the plan, e.g, 50% of the accrued benefit.

Multiple postings of the same question.
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