If you’re going through a divorce or legal separation that will affect your Gusto 401(k), you’ll need to prepare and submit a domestic relations order (DRO). This legal document divides your retirement account according to the court's ruling. Once the document meets all plan requirements, it becomes a Qualified Domestic Relations Order (QDRO).
Gusto provides resources to help you prepare a DRO that meets qualification requirements:
Model QDRO: A template you can use to prepare your order
QDRO Determination Procedure & Checklist: Guidelines for what Gusto accepts and doesn't accept in a DRO
To access these documents in your retirement dashboard, go to Documents, then Resource Library, or contact our participant support team.
Note: You’re not required to use our Model QDRO, but it's designed to make it easier to prepare an order that meets QDRO requirements.
A DRO is approved by a state agency — typically a court — during divorce or legal separation. The parties draft it, the court approves it, and then it’s submitted to the plan administrator.
In general, the DRO must include all the information the plan administrator needs to accurately determine the benefit due to the alternate payee. An alternate payee is the person who will receive a portion of the account — typically a spouse, former spouse, child, or other dependent. If the alternate payee is a minor, the DRO should also specify their guardian.
The DRO must clearly identify:
Who will be assigned the benefit (the alternate payee)
How the benefit amount will be determined (for example, a percentage of the balance on a specific date or a specific dollar amount)
How the benefit will be distributed
For example, if the alternate payee receives 50% of the account balance, the DRO must specify the date that balance is determined and how any outstanding loans will be treated.
The parties have a lot of discretion in determining how a retirement account is treated under a DRO, but there are some limitations. The DRO cannot require anything that is not allowed under the plan document.
For example, if the plan does not allow installment payments, the DRO cannot require that the alternate payee receive $250 per month. You can find general information about your plan in the Summary Plan Description, which may help with drafting the DRO.
Note: We cannot establish separate accounts for alternate payees. DROs that require a separate account will not be qualified and will need to be adjusted and resubmitted.
Before you go to court, you can submit a draft of your DRO for preliminary review. This step is optional, but it could save you a trip back to court to amend a court-certified order.
To submit a draft for review, choose the path that matches how you signed in.
Sign in to Gusto and go to Benefits. Under Savings, find 401(k) and select View, then select Manage 401(k)
Sign in directly at the Gusto Retirement sign-in page.
Once you're in your 401(k) dashboard, follow these steps.
Go to Documents > Shared Files, and upload the document.
Contact us to let us know you've uploaded it.
Important: To initiate the review process for your uploaded documents, you must contact us to confirm the file is ready, as we are not automatically notified upon upload.
We'll check your order to confirm it meets the requirements of:
ERISA (Employee Retirement Income Security Act)
Internal Revenue Code
The plan's QDRO rules and procedures
If your order doesn't meet these requirements, we'll provide feedback. You can then revise and resubmit amended drafts as needed.
Note: Completing the draft review process doesn't qualify the DRO. You'll still need to submit a final, court-approved version for qualification.
Once you have a certified copy of the court order based on your state's requirements, choose the path that matches how you signed in.
Sign in to Gusto and go to Benefits. Under Savings, find 401(k) and select View, then select Manage 401(k)
Sign in directly at the Gusto Retirement sign-in page.
Once you're in your 401(k) dashboard, follow these steps.
Upload the certified court order to the Shared Files folder in your dashboard.
Contact us to let us know it's available for review.
We'll review the final order and notify you of the determination. If your DRO does not meet requirements, we'll provide details on what needs to be fixed and give you the opportunity to adjust and resubmit.
When we receive written notice of a pending domestic relations action — like a divorce or legal separation — and there is a reasonable belief that a DRO will be submitted, no distributions or loans will be permitted from the account.
In general, the restriction remains in place for 18 months or until the DRO has been received.
View the full QDRO Determination Procedure within Documents > Resource Library for more detailed information on what constitutes acceptable notice and when the restriction can be lifted.
This information is general in nature and is for informational purposes only. It should not be construed as legal advice. Participants and alternate payees should consult a legal advisor when preparing a DRO.