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What Happens to Pensions in a Divorce?

One common question people have when going through divorce, especially at an advanced age: is my spouse entitled to any of my pension?

Typically, pension money earned by one spouse during the marriage is classified as a marital asset, just as retirement accounts like IRAs and 401(k)s are. Any money earned prior to the marriage remains separate property, but money earned toward pension or retirement accounts during the marriage will likely be considered a joint asset.

There can be some complications in determining how to split the pension, however. If you are not yet receiving a pension, it can be difficult to determine the pension’s exact value. In New York, the non titled spouse would receive ½ of the benefit that accrued during the marriage. The formula to determine this is known as the Majauskas formula. There are many additional issues that need to be addressed when dividing pensions including survivor options and preretirement death benefits. Defined pension plans must be divided by a separate Court Order known as a Qualified Domestic Relations Order.

Negotiating pension splits

There are some strategies you can employ to hang on to more of your pension in your divorce settlement.

First, consider whether your spouse has their own retirement account or pension. If it has comparable value to yours, you might just both decide to keep your own accounts and avoid the headache of trying to split them. Often times, a pension can be evaluated by an actuary to determine its current value.

If your spouse does not have a retirement account that is approximately equal to your pension, there may be some other joint marital assets you give them instead to keep your account. You could consider offering more value from real estate, or giving up other assets that are not as high-priority for you in the asset split.

For more information about negotiating asset splits in your divorce, contact an experienced divorce lawyer at Jakubowski, Robertson, Maffei, Goldsmith & Tartaglia LLP.