403(b) Accounts in Oregon Divorce Mediation

What to Know About 401(k) Accounts in an Oregon Divorce: The Short Version

A 403(b) account is a pre-tax retirement account for employees of public schools, some not-for-profit organizations, and government employees. It is similar to a 401(k) in terms of its tax treatment and how it can be handled in a divorce.

​All 403(b) accounts in the name of either party must be addressed (or at least acknowledged) in Oregon divorce mediation, even if you do not intend to divide them. The most common ways that Mediator Matthew House's mediation clients choose to divide handle a 401(k) are, generally in order of the frequency, are:
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• The account owner retains the entire balance, and the other party is compensated with other assets for the marital portion of the account.
• A portion of the account is transferred to the other party via a Qualified Domestic Relations Order (QDRO).
• Some or all of the holdings of the account are liquidated (not an ideal approach, but still possible) and the proceeds are divided equally or unequally, depending on the other terms of the Marital Settlement Agreement.​

There are other options, but they are undesirable for multiple reasons and are not likely to meet your needs as well as one of the above.​

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Discovery: What 403(b) documents do you need for divorce mediation?

Matthew will need you to provide:

• Your most recent statements
• The Summary Plan Description (SPD) or other similar nformation
• Any model QDRO templates or checklists available from the Plan Administrator.​

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How will Mediator Matthew House help you handle your 403(b)?

​As you consider the above options and any others that you may want to entertain, Matthew can offer feedback such as:

• The option(s) that can avoid immediate taxation.
• The option(s) that can avoid a 10% penalty for early withdrawal
• The proper method of transfer to ensure a tax-deferred transfer
• The post-divorce documents and/or procedures, if any, for your preferred option
• Any specific requirements noted based on his review of the Plan rules
• Features that may be available only to the employee spouse but not the other spouse
• The option that can be completed in the shortest time, and the timeline for the others
• Steps to take to preserve broad investment choices for the non-employee's portion of the account, if transferred
• The option(s) that can produce liquidity, and the associated tax ramifications
• Helping you determine which types of assets make the most sense for each spouse, considering various factors
• Valuation issues that may affect one or more of the options

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Next Steps

​​Schedule a 90-minute in-person or Zoom introduction (first hour is always FREE)
​or a 30-minute free "meet-and-greet" as soon as you're ready to begin mediation.