From the November 2007 issue of Ceridian Connection

As an employer, you probably won't ever deal with divorces as messy as those of Britney and K-Fed or Paul McCartney and Heather Mills. But statistically, it's fairly certain that divorce has already or will impact your employees at some point. The question is, how can you keep a professional distance while remaining supportive?

While no employer wants to know too much about their employees' personal lives, discretion is especially important when it comes to divorce, when emotions run high and financial futures are at stake. When an employee walks into your office to ask why their soon-to-be ex has access to his 401(k), your first instinct might be to listen and provide advice.

Although a certain amount of compassion is acceptable, getting too involved won't do you, your business or your employee any favors. The best thing for employers to do in this situation is to turn it over to experts who specialize in handling benefits administration related to divorce.

Divorces -- still proceeding
Going through a divorce is a costly, time-consuming and emotionally draining experience. On a scale of stressful life events, divorce consistently ranks number two -- second only to the death of a spouse according to a May 2005 HR Magazine article, "Coping With Divorce," by Linda Wasmer Andrews. While the divorce rate is down slightly from peak rates in the 1980s, it's still more than twice the 1960 rate.

"For the average couple marrying in recent years, the probability of divorce or separation remains nearly 50 percent," says Barbara Dafoe Whitehead, codirector of the National Marriage Project at Rutgers University. "It's reasonable to assume that the rate will remain at that high level for at least another decade."

Demographics also play a role. Your workforce is more likely to have an even higher-than-average divorce rate if it includes employees who:

• Earn less than $25,000 annually.
• Don't have a college degree.
• Live in disadvantaged neighborhoods.
• Don't have a religious affiliation.
• Live in the South, Midwest or West.

Whether or not you have employees who fall into these categories, it makes sense to plan ahead and have resources in place to handle issues that come up when your employees face divorce.

"When employers ask us what to do about an employee who has questions about the dividing of assets due to a divorce, you can almost hear them breathe a sigh of relief when we tell them they can just hand the employee our phone number," said Judy Forster, manager of Employee Services for Ceridian. "They are so relieved to refer their employees to an objective, neutral specialist so they don't have to get in the middle of their employee's divorce details."

Forster says employers have enough on their plate without learning the details of an employee's pending divorce and how they want to hold on to what they feel is their own money. They also don't need to hear about the court orders required to provide medical coverage for dependents under their group health plan.

"These are complicated issues that can negatively impact the employer-employee relationship," Forster said. "That's why we step in to administer the paperwork, answer questions and ensure everything complies with today's laws."

Employees may not realize that the spouse they are divorcing is legally entitled to part of their retirement income. This is where a Qualified Domestic Relations Order (QRDO) comes in. It is a court order stating that retirement benefits, such as pensions and 401(k) plans, must be split with the spouse. Similarly, a Qualified Medical Child Support Order (QMCSO) is a court order that provides medical coverage for a dependent child in a group health plan.

On the case
Ceridian offers administrative solutions for both of these issues, freeing employers from getting involved and enabling them to concentrate on their core business. One call starts it all -- from providing processing packages, protecting participant account information, reviewing orders and issues, responding to written correspondence including subpoenas and restraining orders and much more. Having specialized in QDRO administration since 1991, Ceridian processes more than 7,700 court orders annually.

Ceridian's comprehensive and cost-effective solutions reduce costs for outside counsel and reduce an employer's liability risk. For example, if restrictions are not correctly placed on participants' accounts, an employee potentially could get an early withdrawal from a 401(k) in an effort to reduce or hide assets from his or her spouse. With today's forensic accountants who are hired to discover these types of hidden assets, businesses might be at risk if they don't properly handle these accounts.

For more information about Ceridian's QDRO and QMCSO administration services, contact your Ceridian representative.

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In addition to legal and financial matters pertaining to divorce, there also is the emotional rollercoaster that accompanies these major life-changing events. Divorce can negatively impact an employee's performance at work. Employees may become distracted or depressed, or they might be angry and take it out on their coworkers or even customers.

A referral to an Employee Assistance Program (EAP), like the one offered through Ceridian, can be another valuable resource for your employees. EAPs can offer legal assistance and counseling services, giving employees the opportunity to express their concerns in an appropriate setting. EAPs can also provide assistance with a variety of issues that surface before, during and after a divorce, including:

• Child care
• Housing
• Budgeting
• Individual/group therapy
• Substance abuse

For more information about Ceridian's Employee Assistance Program, contact your Ceridian representative.