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The DRO should also address the following issues. If it does not QC will review the DRO as if it includes the default provision identified below for that issue. Investment Gains/Losses: The DRO should specify whether the Alternate Payee's share of the Participant's benefits will be credited with investment earnings (which include both gains and losses) from the Assignment Date to the date that the Plan Administrator establishes and funds a separate account for the Alternate Payee ("Segregation Date"). If the DRO is silent on this matter, the Plan Administrator will credit investment earnings to the Alternate Payee from the Assignment Date to the Segregation Date. The Plan Administrator will always credit investment earnings to the Alternate Payee's account from the Segregation Date to the date the Alternate Payee receives payment of his/her benefits. Allocation to Alternate Payee from Participant's Accounts: The DRO should state how the Alternate Payee's assigned benefits shall be allocated from all of the Participant's vested sub - accounts and/or investment funds (excluding any Plan loan) as of the Segregation Date. If the DRO is silent on this matter, the Plan Administrator will administer the QDRO as if it included a provision to allocate the Alternate Payee's assigned benefits on a pro rata basis from all of the Participant's vested sub -accounts and/or investment funds (excluding any Plan loan) as of the Segregation Date. Initial Investment of Alternate Payee's Benefits: The DRO should state how the Alternate Payee's benefits shall be initially invested. If the DRO is silent on this matter, the Plan Administrator will administer the QDRO as if it included a provision for the Alternate Payee's benefits to be initially invested in the same funds and in the same proportion as the Participant's account. The DRO should also state that the Alternate Payee may then elect any investment option that the Plan offers. Participant Loans: If the DRO assigns a percentage of the Participant's account balance to the Alternate Payee, the DRO should specify whether the Participant's Plan loans, if any, will be included or excluded in the Participant's account balance when calculating the Alternate Payee's share of the Participant's benefits. The examples below show that including Plan loan value will increase the amount assigned to the Alternate Payee. Example — 50% assignment / Excluding loan balance Participant's Total Account Balance $100,000 Participant's Outstanding Loan Balance $20,000 Participant's Account Balance Excluding Loans $80,000 ($100,000 - $20,000) 50% Assignment to Alternate Payee (0.5 x $80,000) $40,000 Example — 50% assignment / Including loan balance Participant's Total Account Balance $100,000 Participant's Outstanding Loan Balance $20,000 Participant's Account Balance Including Loans $100,000 (loan is not subtracted) 50% Assignment to Alternate Payee (0.5 x $100,000) $50,000 50 City Council 19 — 53 9/19/2023