Who Directs the Investments During Divorce Proceedings? (Posted December 15, 2001) Technical Tip 26: The following question and answer are from the DOL Q&A Session at the 2000 ASPPA Annual Conference: After the segregation of participant account balances based on a DRO [a court's "Domestic Relations Order"] (in a participant-directed plan), who should direct the investment of the segregated balance while the DRO is being reviewed to determine qualification? DOL Response: The answer depends on the terms of the plan and/or on the terms of the plan's QDRO procedure [that is, on the terms of the plan's procedure for "Qualified Domestic Relations Orders"]. Moderators Comment: In our experience, very few plans or QDRO procedures have provisions on investment direction prior to the approval of the QDRO. Thus, the plan provisions giving direction responsibility to the participant should be followed, unless it would be imprudent to do so. In that latter case, the plan fiduciaries would have the responsibility for managing the investments and 404(c) protection would be lost. Caveat: The answer was drafted by Fred Reish and Brad Huss, the program moderators, based on their understandings of discussions with four senior officials of the Pension and Welfare Benefits Administration (PWBA) of the U.S. DOL. As a result, it does not represent a formal or binding position statement by the PWBA. View all Tips © 2012 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.