Article: Nonqualified Deferred Compensation and Domestic Relations Orders

Retirement plan assets are often a significant part of marital assets in a divorce. For executives, the most substantial retirement asset is often benefits due under one or more nonqualified plans (rather than under their employer’s broad-based qualified pension and 401(k) and retirement saving plans). Unlike qualified pensions and retirement savings benefits, however, nonqualified benefits may be so difficult to divide that transferring other nonretirement assets to the nonemployee spouse is ordinarily more practical.