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Service Disclosure Guide for Plan Sponsorsqdros.comLast Revised: November 2018
Table of ContentsQSection 1: Firm Profile3Section 2: Mission & Values4Section 3: Competitive Advantage5Section 4: Understanding Services and RelatedCompensation64.1 Compensation74.2 Fiduciary Responsibility8Section 5: Service Summary9Section 6: Data Security11Section 7: Onboarding & Implementation12Section 8: What They’re Saying13QDRO Consultants is here to help!Interested in learning more about our services? Ask to speak to a member of ourOnboarding Team at 800-527-8481, or send an email to onboarding@qdros.com,Monday through Friday 8:30 am to 5:00 pm (ET).Note: The discussions and interpretations in this brochure of ERISA and the regulations promulgated bythe Department of Labor are ours. We are not offering legal advice. That is the province of your legalcounsel. Instead, we are offering our perspective on how we help plan sponsors fulfill their fiduciaryduties in selecting and monitoring service providers regarding the quality of services provided and thereasonableness of fees.
QSection One: Firm ProfileQDRO Consultants provides services for morethan 3,000 plan sponsors and dozens of Fortune500 companies. These organizations wish to havetheir employees benefit from the personalizedprofessional help we provide in dividingretirement assets.Plan sponsors and recordkeepers typicallyview the complex world of qualified orderreview and determination as burdensome.They assess that the significant time andresources spent developing sufficientexpertise in an esoteric area of the law asfinancially inefficient and a diversion fromthe primary, value-added services theyprovide. They also recognize howdemanding it is to service plan participantsduring an especially stressful period in theirlives.The search for a quality order serviceprovider at the ERISA-mandated“reasonable” fee has becomecommonplace. This due diligence obligationhas thrust QDRO Consultants to theforefront as the qualified order serviceprovider of choice for thousands of plansponsors.A little background: Founded in 1985, thecompany’s staff members have authored eight ofthe leading legal texts in the field over the lastseveral decades. This unsurpassed subject matterknowledge has been translated into clear, efficientsystems as well as the largest, most experiencedand well-trained staff in the country. Our staff, forexample, average over a decade in the field. Our“high touch” servicing model has been developedand refined over more than two-decades.We pride ourselves in offering a servicing modelwhere all involved parties have phone and emailaccess to a dedicated team member familiar withtheir case. Contrast that to others in the field whorestrict all communication to writing, or utilize callcenters where the parties cannot speak to theperson reviewing their order or others who justignore ERISA and DOL guidelines by refusing torespond to anyone other than a Plan participant ora subpoena.Our flat-rate fee structure is benchmarked wellbelow all national competitors and a stark contrastto “two tier” service providers, i.e those whocharge one fee for processing model orders andanother fee, sometimes four times as much, forprocessing a lawyer-crafted order.3
Section Two: Mission and ValuesMissionWe provide world-class QDRO & QMCSO leadership for our plan sponsors & theiremployees, that helps families—in a challenging time, move forward.ValuesHUMAN TOUCHEveryone deserves a friendly, helpful person on the other end of the phone,email or letter. Each interaction is an opportunity to problem-solve, to teach,and to learn. We're always available to give all inquiries our undividedattention until they are resolved--regardless of complexity.DEEP EXPERTISEOur confidence is built on our expertise from decades in the field. We keepour focus narrow, and our passion high. There are no limits to ourcommitment to remain at the forefront of expertise in the industry.CANDID & CLEARThe quality of our relationships is determined by how we communicate.Clarity and candor are the most direct, efficient path toward the bestpossible outcome. Everyone deserves context, and the right information atthe right time.SELF-REFLECTIVEOur success comes from finding a better way to do things. We pause andreflect before making the next big push. We find time to assess what isworking and what isn't, then swiftly set a new course.BUILT TO GROWA healthy business is made up of growth-oriented individuals. We stayfocused on providing resources and development that foster growth. Ourcontinued success requires adaptive performance--our ability to deviatefrom the plan and grow as a result.4
Section Three: Competitive AdvantageQDRO Consultants has become the qualified order service provider of choice for thousands of plansponsors, third party recordkeepers and benefit administrators for three straightforward reasons:Our superior servicing model: Unlike so many service providers that require all inquiries bemade in writing, our knowledgeable team members are empowered to address questions byphone and email. This reduces legal fees for all parties involved and employee anxiety.Our reasonable fee: Our fee is the same reasonable review and determination fee whetherthe order submitted utilizes the Plan model or is crafted by an attorney. Plan fiduciaries don'thave to worry that excessive fees are assessed for reviewing orders. In fact, our fee issignificantly less than all major competitors. We never pressure your Plan participants to usethe Plan models by charging three to four times as much when the order is tailored by anattorney to reflect the agreement or the judgment entry as is common in the field. This alsohelps the Plan avoid the adverse publicity that such a practice engenders in the legalcommunity and amongst divorcing parties.The most experienced and knowledgeable staff in the country: Staff members haveauthored eight leading legal texts in the field over the last 22 years including DividingPensions in Divorce: Negotiating and Drafting Safe Settlements with QDROs and PresentValues, Third Edition and Value of Pensions in Divorce, Fifth Edition. This unsurpassedtechnical knowledge of QDROs and QMCSOs is coupled with the most experienced staff inthe field.Of course, these are only three of our advantages. Consider some of the following advantages aswell to understand how we have become the compelling choice when quality service, cost andemployee satisfaction are paramount. Our single low, flat-rate fee per order. This means that a single fee is assessed regardless ofhow many draft or executed orders are submitted for review in a particular order. Quick and accurate reviews utilizing our customized and proprietary qualification softwaresystem. Participants, involved parties and their counsel have easy access to Plan Procedures andGuidelines through our Q-Hub online portal. Client access to our Qualified Order Database via our secure, web-based application. Huge down-the-road plan savings because a Processing Form (or your recordkeeper’spreferred form) is generated upon the approval of every order, eliminating the need for yourrecordkeeper or actuary to reread and reinterpret the Order upon implementation. Instant access to many of the most knowledgeable and experienced qualified order experts inthe country to help resolve even the most challenging case.5
Section Four: Understanding Services and Related FeesThe Employee Retirement Income SecurityAct (ERISA) and the Department of Labor(DOL) are clear that a plan sponsor is afiduciary and ERISA Section 404(a) makesclear that a “fiduciary shall discharge theirduties with respect to a plan solely in theinterest of the participants andbeneficiaries.” Of course, hiring a serviceprovider is a central fiduciary task and those“who do not follow the basic standards ofconduct may be personally liable to restoreany losses to the plan.”including many of the largest plans in thecountry. Our fees are benchmarked toremain significantly below all nationalcompetitors all while providing a “hightouch” servicing model where all parties caneasily reach a knowledgeable team memberfamiliar with their case by phone or email.What is the added value provided by ourhigh-touch servicing model? The QDROConsultants superior servicing model is yourinsurance policy that your Plan participantscome first. That your concern for your Planparticipants is not just lowering direct Planexpenses but extends to lowering theanxiety (and legal expenses) of participantsand their families with quick, accurate,personal answers.In other words, we are acutely aware of thegravity of your choice of a service provider.You will see evidence of that deepunderstanding in chapters of booksauthored by our staff. A review of“Understanding the QDRO Administrator”by our corporate counsel in the Value ofPensions in Divorce, Fifth Edition will bereassuring. You will see how statutoryobligations guide the structuring of fees andservices, especially two basic DOLdirectives that QDRO procedures be inwriting and be reasonable.The information that follows is focused onyour basic ERISA fiduciary duties, especiallythose dealing with the quality of servicesprovided, the fees charged and the ongoingduty to monitor performance of each serviceprovider. In addition, we will put the rulesand regulations promulgated by theDepartment of Labor into our review of theservices we provide the parties, the servicesprovided to you as the plan sponsors andthe fees associated with each.Our written procedures, services and feesare clearly reasonable. They are the resultof our experience in the review anddetermination process for QDROs andQMCSOs for more than 3,000 plans --6
4.1 Compensation: How we stack up against the competitionQDRO Consultants’ fees are benchmarked below other national providers in the qualifiedorder review and determination field. Our reasonable fees are coupled with our superior hightouch servicing model, delivered by the most experienced team in the country. Moreover,QDRO Consultants only receives “Direct Compensation” and no “Indirect Compensation” asthe term is used in the regulations promulgated under ERISA Section 408(b)(2).You can find additional information about the fee regulations and the importance ofunderstanding fees in the US Department of Labor (DOL) publication “UnderstandingRetirement Plan Fees.”Our fee is the same whether your participant utilizes the Plan’s model order or an attorneycrafted order. After all, the Plan’s model is just that -- a model. Keep in mind that a model maynot always effectively provide for the intended division of the benefit. Other providersdramatically increase the fee for review of lawyer crafted orders -- in some case more thantriple the fee.Direct access when they need it. Your participants and other involved parties are free to submitorders directly to their designated team member via email, fax, or mail. QDRO Consultants aimsto make their lives easier, not more difficult during a challenging time. In the event that theparties have a question, they will have direct access by phone or email to the team memberreviewing their case. No need to spend time navigating a call center or phone tree.77
4.2 Fiduciary ResponsibilityQDRO Consultants does not act in thecapacity of a plan fiduciary. The IRS makesclear that a plan fiduciary is: “Anyone whoexercises discretionary authority ordiscretionary control over management oradministration of the plan, exercises anyauthority or control over management ordisposition of plan assets, or givesinvestment advice for a fee or othercompensation with respect to assets of theplan.”Plan Sponsor in reviewing and qualifyingorders. More to the point: We rely soley onthe terms and provisions of theseprocedures and guidelines for the qualifiedorder approval process. We provide QDROand QMCSO procedures and guidelinesbased on best practices for Plan Sponsorsto consider in electing procedures to aparticular plan, but ultimately it’s a PlanSponsor’s decision on the adoption of planprocedures for QDROs and QMCSOs.Instead, QDRO Consultants’ services areministerial, following the elections of theFor more information about plan fiduciary obligations, check out the DOL resource“Meeting Your Fiduciary Responsibilities.”88
Section Five: Service SummaryQDROServiceDescriptionImplementationPrepare customized plan specific QDRO Procedures and Guidelines and modellanguage. The QDRO Procedures shall document all of the Client’s QDRO reviewand determination procedures, contain model language and shall address alldefault procedures. Review &DeterminationService Handle all correspondence to and from involved parties and attorneys,including phone, email and other written communication.Send QDRO Procedures and Guidelines and model QDRO language toinvolved parties and attorneys.Following receipt of a DRO, request a hold on the Participant’s benefit andconfirm applicable benefit information.Acknowledge receipt of the DRO and review the DRO to determine whetherthe order meets the requirements of applicable federal law and satisfies therequirements contained in the Plan’s adopted QDRO Procedures andGuidelines.After review of a DRO, prepare and distribute approval, pre-approval or denialletters to the involved parties and attorneys.Following approval, prepare a QDRO Processing Form for use by the Plan’srecordkeeper.Joinder ResponseCalifornia Family Code §2443 requires joinder of some types of retirement plansin divorce proceedings. While joinder is not required for plans established underTitle 1 of ERISA, plans may face the challenge and hassle of responding to receiptof joinders.Optional ServiceFor plans that elect this service, QDRO Consultants, responds by: Executing the Notice of Acknowledgement of Receipt and returning theexecuted copy to the submitting attorney or party. Completing of the Notice of Appearance and Response and submits to theappropriate court for filing along with the required Proof of Service. Distributing copies of joinder documents along with copies of the Plan’s QDROProcedures and Guidelines and model language to counsel and/or the parties.9
QMCSO/NMSNServiceDescriptionImplementationPrepare customized plan specific QMCSO Procedures and Guidelines and modelorder language. The QMCSO Procedures shall document all of the Client’sQMCSO and NMSN procedures, contain model QMCSOs and shall address alldefault procedures. Review &DeterminationService Termination Notices HealthcareVerification Forms Handle all correspondence to and from involved parties and attorneys,including phone, email and other written communication.Send QMCSO Procedures and model QMCSO language to all involved parties(attorneys, plan participants and custodial parents).Following receipt of a QMCSO/NMSN, review the terms of the QMCSO/NMSNto determine whether the Order is consistent with federal law and specific planprovisions.Prepare and distribute approval or denial letter along with completing thenecessary Plan Administrator response, if applicable to all involved parties(attorneys, plan participants, custodial parents and State IV-D Agencies).Following approval, prepare a QMCSO Processing Form for use by the Plan’sbenefit administrator.Direct benefit administrator to enroll dependent, as applicable, and placeappropriate QMCSO flag.Following receipt of a Termination Notice, QDRO Consultants will review thenotice to see if the court ordered obligation can be released.After review of the Termination Notice, prepare and distribute approval ordenial letter to employee, custodial parent, and State IV-D Agency.Following approval, prepare Processing Form for use by the Plan’s benefitadministrator.Benefit administrator removes flag from employee’s healthcare. Thedependent will not automatically be removed from coverage -- the employeemust elect to remove the dependent.Upon receipt of a State IV-D Agency Healthcare Verification Form, confirmapplicable participant benefit information and complete form.Forward completed form to the issuing agency.10
Section Six: Data SecurityPerhaps most importantly, we recognize theimportance of a robust data security cultureamong staff. After all, so many breaches involvehuman error. To mitigate this risk, we holdfrequent staff trainings to keep our team vigilant inlooking for the latest security threats.Zealous Focus on Data SecurityWe take the trust plan sponsors place in usseriously.IT security infrastructure is a toporganizational priority at QDRO Consultants-- and it has been for years. Our datasecurity efforts are led up by a talented,experienced and credentialed team ofprofessionals that stay on the cutting edgeof industry trends and best practices.ApproachWe run a tight IT ship. Consider this: Allelectronic data is both encrypted at rest andanytime electronic PII leaves our network.We maintain a locked down infrastructure.What does this mean? It means that wehave no wireless network, no laptops, nopersonal devices and no external or remotenetwork access. Further, we contract a thirdparty infosec firm to perform an annualpenetration test on our network. Ourinternal IT team also conducts quarterlyvulnerability scans.Additionally, while we are big believers in oursystems, policies, and security-conscious culture,we understand the need for third party verificationof these practices. QDRO Consultants willtherefore procure annual SOC 2 audits beginningin 2019.SnapshotTake a look at our IT data security practices (keepin mind that these are constantly evolving): Locked down machines with standardhardened image only; Windows 10 App Locker allows only 12applications to run on our domain; No wireless networks; No external access; No remote workers or VPN connections All employees are full-time staff and undergothe same background check, employmentverification, and educational check. No thirdparty contractors or temp employees; No laptops; Use of removable media is disabled by policyand technical controls; Default deny all rule makes all incoming portsappear dead to the world; Outgoing ports locked down; Untangle NG Firewall configured to scan alltraffic. Traffic is passed through the followingmodules: Intrusion Prevention, Web Filter, VirusBlocker, Application Control, Firewall.11
Section Seven: Onboarding & ImplementationWith QDRO Consultants’ deep expertise, a member of our Onboarding Team is ready to discuss theintricate details of the qualified order review and determination process as well as walk you throughthe seven simple steps to implement service:Step 1: Plan Due Diligence – Hiring a plan service provider is a fiduciary function. OurService & Fee Disclosure Guide for Plan Sponsors provides a comprehensive overview ofthe services we provide and the associated fees.Step 2: Execute Service Agreement – Which includes a Statement of Work and DataSecurity Practices. This step may not be necessary if your Plan recordkeeper subcontractsthe qualified order review and determination process to QDRO Consultants.Step 3: Complete Implementation Checklist – The Plan provides critical information whichenables QDRO Consultants to develop proposed plan specific procedures and modelorders.Step 4: Submit the requested Plan Documents – Summary Plan Description, PlanAmendments, Existing Qualified Order Procedures and a current Plan Document.Once the Plan has completed Steps 2-4, QDRO Consultants will prepare plan specific procedures andmodel language that leverage best practices in the industry, for the Plan to review. Plans should allowone to two weeks for preparation.Step 5: Plan reviews and considers customized plan procedures and model orders –QDRO Consultants provides procedures and guidelines based on best practices in theindustry for the Plan to consider in electing procedures, but ultimately it is the Plan’sdecision whether to elect to adopt the procedures.Step 6: Execute Plan Adoption Acknowledgment – The Plan memorializes theiradoption of the procedures and model language by executing the Plan AdoptionAcknowledgment and returning to QDRO Consultants. We are ready to get started!Step 7: Kick-Off Conference Call with Team QDRO Consultants – A quick review anddiscussion on the day-to-day logistics.What’s the average length of time for a Plan to complete the onboarding process?It depends. The timeline for onboarding is largely in the hands of the Plan Sponsor. Keep in mind thateach of the steps detailed above must be completed in order for QDRO Consultants to commenceservices. As a general rule, plans should allow for a minimum of at least one month lead-up time, priorto the desired effective date of service, to finalize this checklist of pre-service work.Visit our Plan Sponsor page for more information about our services. Plan Onboarding Overview Onboarding Videos12
Section Eight: What They’re Saying“See this is why I really like you guys over there. Even though you have gottenlarger than you used to be, you are one of only a couple of third partyadministrators that actually thoroughly train your staff to understand thespecifics of the plans. You would be surprised how many third partyadministrators I call that have no clue how a plan works.“““I am an attorney in Connecticut who drafts over 1,500 QDROs each year. Iinteract with hundreds of plan administrators. QDRO Consultants is one of thebest ever. The staff is knowledgeable and efficient. I wish more companieswould outsource to them!I'm always a bit reluctant to give 5-Star reviews as this should be reserved foronly stellar performance. As a family law attorney I deal with numerousQDROs every year. QDRO Consultants is easily the most helpful, prompt andcourteous of administrator services. It is always a pleasure processing QDROsthrough QDRO Consultants.“””Over the past couple of months, I have been going through the QDRO processfor my 401k distribution due to a divorce settlement. The process has wentseamlessly due to the AWESOME assistance of Renee. She has helped guide meand dragged me at times to the finish line. Without her assistance, I’m sure wewould still be months away from being complete. I just want everyone there atyour Company to know about the quality of assistance and the care that Reneehas provided to us I could not have done it without her!I had the pleasure of working with Christina when I was going through toughtimes. She was prompt, committed to excellence, sensitive to my needs, andhighly knowledgeable about the content. She always followed through on allof the deliverables. I think very highly of QDRO primarily because of myexperience with Christina. She is top notch.13”””
We’re here to help!Interested in learning more about our services? Ask to speak to a member of ourOnboarding Team at 800-527-8481, or send an email to onboarding@qdros.com, Mondaythrough Friday 8:30 am to 5:00 pm (ET). Visit our website.
QDRO Consultants only receives "Direct Compensation" and no "Indirect Compensation" as the term is used in the regulations promulgated under ERISA Section 408(b)(2). Our fee is the same whether your participant utilizes the Plan's model order or an attorney crafted order. After all, the Plan's model is just that -- a model.
