Letter to the Hon. Gene Dodaro, US Comptroller General, Government Accountability Office - Murray Requests Oversight of Process for Dividing Retirement Assets in Divorce

Letter

Dear Mr. Dodaro,

I write today to request that the U.S. Government Accountability Office examine the process by which pensions or retirement accounts are divided following a divorce or legal separation. I understand that it is an expensive and complex process to obtain a Qualified Domestic Relations Order (QDRO). Though the divorce rate has leveled out, approximately 40 percent of all marriages still end in a divorce. I understand that these factors may result in many people leaving money on the table and those people are disproportionately women. Ensuring divorcees receive the retirement benefits they are entitled to is particularly important for women's economic security, as divorce can have a clear adverse effect on their income and women already are more likely to face poverty in retirement.

A 2012 GAO study found that women's household income and assets, on average, fell by 41 percent with divorce, with the income decline being almost twice the size of the decline that men experienced. One protection available to women is the QDRO, which creates or recognizes the existence of a right to receive a share of retirement benefits. DOL issued interim regulations governing QDROs in 2007, with final regulations issued in 2010. Since that time, there have been concerns that the current QDRO process has not been wholly effective in protecting the rights of alternate payees, especially women. There has also been little oversight to consider how accessible QDROs are and whether some communities might be disadvantaged by the current process. Specifically I am requesting GAO to examine the following issues:

1. How does the QDRO process typically work in practice? For example, for the typical middle income household, how complex is the process for securing a QDRO? How much time does a typical QDRO take from initiation to final resolution? What are some of the key "pain points" or complications in the current process?

2. What are the types and levels of fees and overall costs for the parties involved? Are these fees generally contemplated by a state authority at the point a judgment, decree, or order is made pursuant to state domestic relations law?

3. What is the impact of the current process on certain segments of the population, for example, lower income women, women of color, and victims of domestic violence? Who is disadvantaged because of the expense, complexity, and time-consuming nature of the current process?

4. What role can retirement plans and retirement plan providers play in facilitating the QDRO process or reducing its costs?

5. What are possible legislative or regulatory options that could improve this process or ease the financial burdens associated with obtaining a QDRO?

I appreciate GAO's assistance with this study. If you have any questions concerning this request, please contact Kendra Isaacson, Senior Pensions Counsel, at (202) 224-6572. Thank you for your attention to this matter.

Sincerely,

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