How Are Retirement Accounts Divided in a Missouri Divorce?
It depends entirely on which plan it is. A private 401k takes a qualified domestic relations order. An IRA takes the custodian’s own transfer due to divorce form, never a QDRO. The Missouri state employee system uses a different order with a different name, and two common Missouri public systems cannot be divided in a divorce at all.
Retirement accounts divided in a Missouri divorce follow the plan, not a percentage, and the last item on that list is the one that reorders people’s expectations. It is not obscure. It affects teachers and local government employees across St. Louis County, and the Supreme Court of Missouri settled it in 2003.
So the first useful question is never what percentage. It is what plan. The Missouri chapter is public at the Missouri Revisor of Statutes and in the Chapter 452 index.
Which Instrument Governs Retirement Accounts Divided in a Missouri Divorce?
A QDRO is a creature of federal law and it reaches private employer plans only.
That single fact explains every surprise on this page. A qualified domestic relations order exists as an exception to the anti alienation rule in 29 U.S.C. Section 1056(d), which provides that “Each pension plan shall provide that benefits provided under the plan may not be assigned or alienated”, and then disapplies that rule where an order “is determined to be a qualified domestic relations order.”
ERISA does not reach governmental plans. 29 U.S.C. Section 1003(b)(1) takes a governmental plan outside the whole subchapter, so the QDRO exception has nothing to attach to. That is the structural reason a Missouri public plan behaves so differently from a private one.
- Private 401k and private defined benefit pension. Divided by a QDRO
- IRA. Never a QDRO. The judgment awards the share, and the custodian moves it on its own transfer due to divorce form, under Section 408(d)(6) of the Internal Revenue Code
- 403(b). It depends on the employer. A private hospital or university plan is usually an ERISA plan. A Missouri public school district 403(b) is a governmental plan and is excluded from ERISA outright
- MOSERS, the state employee system. A division of benefits order, not a QDRO, on terms the statute itself sets
- Military retired pay. Its own federal statute at 10 U.S.C. Section 1408, its own application process and its own limits
Getting the instrument wrong is not a formality. A plan that receives the wrong kind of order rejects it, and the parties find out months later. An IRA custodian handed a QDRO does the same. That is the most common avoidable error with retirement accounts in divorce.
What Is a Transfer Due to Divorce Form for an IRA?
It is the custodian’s own paperwork for moving all or part of an IRA to a spouse or former spouse, and it is how nearly every IRA gets divided.
An IRA is not an employer plan, so there is no plan administrator to review a court order. The bank or brokerage holding the account does the work instead, and each one publishes its own form. The name varies by custodian. Fidelity calls it a Transfer Due to Divorce form, and other custodians use titles such as IRA Transfer Request Due to Divorce. The substance is the same.
Fidelity’s version is a fair example of what custodians ask for.
- The judgment pages. A copy of the decree signed by a judge, limited to the pages showing that the divorce is granted, identifying both parties and carrying the judge’s signature
- Both signatures. The account owner and the receiving spouse both sign
- An account to receive it. The receiving spouse needs an IRA of the same type at that custodian, or opens one with the form
- Like for like. Traditional to traditional, Roth to Roth. A divorce transfer cannot land in a taxable brokerage account
- A signature guarantee on larger transfers. Fidelity requires a Medallion signature guarantee above $100,000 unless the form is completed in person
The form executes the judgment. It does not replace it. The custodian will only move what the judgment awards, so the judgment has to identify the account, state a dollar amount or a percentage, fix the valuation date and say who carries the gains and losses between that date and the transfer. A judgment that says only “divided equally” leaves the custodian guessing, and custodians do not guess. They reject.
Requirements differ between custodians and change over time, so pull the current form from the custodian holding the account before the judgment is drafted, not after.
What Does Section 408(d)(6) Say About an IRA?
That a transfer to a spouse or former spouse under a divorce instrument is not a taxable transfer.
The provision states that such a transfer “is not to be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest at the time of the transfer is to be treated as an individual retirement account of such spouse, and not of such individual.”
Note what carries the transfer. The divorce or separation instrument itself, executed through the custodian’s transfer due to divorce form, not a plan order. The money has to move directly from one IRA to the other. An owner who withdraws the funds and hands over a check has taken a distribution, and the tax and any early withdrawal penalty land on the owner.
How Is Military Retired Pay Different?
It runs on its own statute, with a fifty percent ceiling and a ten year threshold for direct payment.
Section 1408 lets a court treat disposable retired pay “either as property solely of the member or as property of the member and his spouse.” Where a former spouse is entitled to a share, the total payable under all court orders “may not exceed 50 percent” of disposable retired pay.
The ten year rule decides who cuts the check, not who owns the share. Where the marriage did not overlap ten years of creditable service, the defense finance office will not pay a property award directly and the payment obligation stays with the member. That is a collection problem to solve in the judgment rather than after it.
Which Missouri Plans Cannot Be Divided?
Two, and both are ordinary employers here.
PSRS and PEERS, the public school retirement systems. Section 169.572 RSMo lets a court divide a benefit under that chapter “to the same extent and in the same manner the court may divide any federal old-age, survivors or disability insurance benefit of the parties provided pursuant to the federal Social Security Act.” The first subsection of the same statute forbids dividing a Social Security benefit at all. Read together, the extent is none.
LAGERS, the local government employees system. Section 70.695 RSMo puts every right accrued under the LAGERS sections beyond “execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or to any other process of law whatsoever” and makes them unassignable. The exceptions are narrow, and child support is one of them. An ordinary marital property division is not.
Both of those are enforcement problems disguised as division problems. Where a plan cannot be reached, the answer is to build security into the judgment or to take equivalent value from elsewhere in the estate, and that has to happen before the judgment is entered rather than after.
Our FAQ on how marital property gets divided covers the offsetting side, and our FAQ on the financial considerations in a divorce covers what else belongs on the list.
What Did the Supreme Court of Missouri Decide About Teacher Retirement?
That a public school retirement benefit is not marital property and cannot be divided, though the judge may still take it into account.
In re Marriage of Woodson, 92 S.W.3d 780, involved a teacher benefit valued at $193,693. The trial court treated it as nonmarital, and the Supreme Court of Missouri agreed that Section 169.572 left it undividable while allowing the judge to consider it as a factor in distributing the marital property that remained. The Western District had reached the same conclusion on divisibility nine years earlier in Kieninger v. Catlett, 854 S.W.2d 59.
The practical consequence is an offset rather than a split. A spouse sitting across from a six figure teacher pension is not going to receive a share of it. What they can receive is more of everything else, which is exactly why the benefit still has to be valued rather than waved past as untouchable.
What About MOSERS?
Divisible, capped, and governed by statute rather than by plan policy.
Section 104.1051 RSMo provides that an annuity under the year 2000 plan “is marital property and a court of competent jurisdiction may divide such annuity”, in an amount “which shall not exceed fifty percent of the amount of the member’s annuity accrued during all or part of the period of the marriage.” The share is “based on the member’s vested annuity on the date of the dissolution of marriage or an earlier date as specified in the order”, the order “shall not require the applicable retirement system to commence payments until the member’s annuity starting date”, and the division “shall terminate upon the death of either the member or the former spouse, whichever occurs first.”
Section 104.312 RSMo carries the parallel division of benefits order rules for the closed plan, including what the system may reject.
Two of those provisions decide real cases. The fifty percent ceiling means a MOSERS annuity cannot be traded as though it were a bank balance. The payment trigger means a former spouse awarded a share may wait years to see a dollar of it, and that belongs in the negotiation rather than in a phone call three years later.
What Part of Retirement Accounts Divided in a Missouri Divorce Is Marital?
What was earned during the marriage, and the presumption starts there.
Section 452.330.3 RSMo presumes that property acquired after the marriage and before a decree is marital, regardless of how title is held. An account in one spouse’s name alone is squarely inside that presumption, and that includes an IRA.
Where an account existed before the marriage, Section 452.330.2(5) RSMo excludes the increase in value of premarital property “unless marital assets including labor, have contributed to such increases and then only to the extent of such contributions”. Contributions made during the marriage are marital. Passive market growth on the premarital balance generally is not.
That makes retirement accounts in divorce a tracing exercise. The balance on the wedding day, the contributions since, and the growth attributable to each. Statements are the evidence, and the older ones are the hard ones to find, so the request should go out early rather than the week before trial. IRAs deserve extra care here, because a rollover from an old 401k can mix premarital and marital money in a single account.
How Does a Court Structure Retirement Accounts in Divorce?
Either a share paid when benefits are received, or an offset now.
The Supreme Court of Missouri set out the flexibility in Kuchta v. Kuchta, 636 S.W.2d 663. It described establishing “a certain portion of the retirement benefits to be paid to the non-working spouse if and when the working spouse retires and begins to receive them”, and held that “the trial court must be given a broad discretion to design ‘some plan’ protecting the rights, and hopefully best interests, of the parties.”
A defined contribution account such as a 401k, and an IRA, is usually split by a stated dollar amount or percentage as of a date. A defined benefit pension is usually handled as a share payable when the benefit begins. Our FAQ on protecting a 401k in a divorce covers the 401k side, and decree terms are enforceable under Section 452.325.5 RSMo.
Is It Too Late If the Order Was Never Entered?
Usually not, and there is a federal regulation on the point.
29 CFR Section 2530.206 provides that “A domestic relations order shall not fail to be treated as a qualified domestic relations order solely because of the time at which it is issued.”
That is genuine relief for the many people who discover years later that the order was never done. The same is true of an IRA transfer due to divorce form that was never filed, since the judgment still awards the share. Neither is a reason to wait, because plans change administrators, participants change jobs and balances get spent.
What Do Retirement Accounts in Divorce Not Decide?
Three things worth separating out.
They do not decide non qualified deferred compensation, which no QDRO can reach for a structural reason worth understanding. Our FAQ on deferred compensation in a divorce covers it.
They do not decide the tax. Transfers between spouses incident to divorce run on Section 1041 of the Internal Revenue Code, and distributions have their own consequences, which belong with your tax advisor.
And they do not decide the split. Section 452.330.1 RSMo divides marital property “in such proportions as the court deems just”, and a retirement account is one asset inside that exercise rather than a separate one. Our FAQ on protecting assets during a divorce covers what to do before the first hearing.
Who Can Help With Retirement Accounts Divided in a Missouri Divorce?
The rule people arrive with, that a QDRO splits any account in half, is wrong in at least four ways for a St. Louis household. Which plan it is decides the instrument, the ceiling, the timing and in two cases whether the benefit can be divided at all. For an IRA, it decides that there is no QDRO, only a judgment and the custodian’s transfer due to divorce form.
Bardol Law Firm practices only family law, in St. Louis County, St. Louis City, St. Charles County and Jefferson County. We identify the plan before anybody negotiates a percentage, we draft the judgment so the plan or custodian will accept it the first time, and we work with your own financial and tax advisors rather than replacing them. Bring the plan name and the most recent statement for every account. You can read more on our division of property page, our high net worth divorce page, and across the rest of our family law questions and answers.
You should not have to chase your attorney to find out whether an order was ever entered or a transfer form ever filed. Every client here has a named paralegal on the file, and we generally return calls within one business day.
Family Law, Simplified.
Bring the plan name to the first meeting, because it decides most of this. Contact Bardol Law Firm or call 314.918.0100.
This page is general information about Missouri law and is not legal advice. Every case turns on its own facts. The choice of a lawyer is an important decision and should not be based solely upon advertisements.