If your spouse’s employer offered a pension plan, you may have counted on that money to help fund your retirement. Now that you are getting divorced, you may be worried about your future. You wonder if you’ll have the resources you need to retire. This can be especially stressful if you are over 50.
Fortunately, a pension plan is treated like any asset that acquires value during the marriage. This means that it can be divided. However, it will not be divided automatically.
First, you should determine if the pension should be divided. If you or your spouse have other retirement assets, it might be wiser to offset the value of the pension plan with other retirement accounts. This will save you the cost of dividing a pension plan.
If you’d prefer to have your spouse’s pension plan divided, you must specifically ask for your share of the pension at the time of your divorce. If there is more than one pension plan or a traditional pension plan and a 401(k), you must ask for a share of each. Your attorney will then consult with an experienced pension analyst to determine the marital value of each plan.
Once the marital value of the pension plan has been determined, your attorney will estimate your share of the pension. He will prepare a QDRO or Qualifying Domestic Relations Order to divide the pension plan.
The QDRO is a separate court order that is submitted to the administrator of the pension plan. The QDRO informs the company of your right to a portion of the pension and makes sure that neither you nor your spouse is penalized for the division. It also makes you responsible for any taxes owed when your share of the pension is distributed.
Retirement is an important consideration in any divorce. Make sure your future is protected; contact Petrelli Previtera Schimmel at 215-523-6900.