A judgment, decree, or order by a court that assigns all or a portion of an individual's company benefits to another person. The order recognizes the right of an "alternate payee" to receive all or part of a retirement or pension plan that belongs to another person.

Some stock plans provide for a QDRO to transfer stock options from the plan participant to a spouse as part of a divorce settlement. Technically, a QDRO applies only to employee benefits protected by ERISA (e.g. a 401(k) plan), but it is often commonly used to refer to any state order dividing property. (For more on QDROs, see FAQs published by the US Department of Labor.)