In most cases, the Alternate Payee’s portion must be expressed as either a specific dollar amount, or as a percentage of the account.
When dividing a defined contribution plan, the Alternate Payee is typically awarded a portion of the Participant's account balance as of a specific date (the 'Valuation Date' or 'Assignment Date').
A division of this type of account must be done by way of a Qualified Domestic Relations Order (QDRO). Examples of this plan type are Employee Stock Ownership Plan (ESOP), Profit-Sharing Plans, 401(a), Savings Plans and 401(k). Regular contributions are then made by the Employer, the Participant, or both. Typically, a Company Sponsor (Employer) of this type of plan creates an account for every individual Participant. 401(K) PLAN is a DEFINED CONTRIBUTION PLAN.
