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Retirement & Pension Division

There are two general forms of retirement plans. The "traditional" is known as the "defined benefit" type of plan; this is the "old fashioned" plan that calculates the amount of time you have been earning credits then awards you a set retirement payment when you are eligible to retire. The other plans are known as "defined contribution" plans; these turn on how much money money you put into the plan how much your employer contributed and the performance of the investment in the market. These are the 401k and 403b plans.

Both types of plans are subject to equal division of the community interest in the plan. But the methodology will be quite different for each type of plan (and, sometimes, both plans will be at issue in a give case).

The community interest in a defined benefit plan is usually divided by what is known as a time line, sometimes referred to as the Brown time line after the formula set out in In re Marriage of Brown. This takes the total amount of time one party used to get credit towards the retirement, how many of those days/months were during the marriage, and computes what portion is community and what portion is the separate property of the retiree or would-be retiree. This can also be done even though the party is not yet retired.

The community interest in a defined benefit plan is calculated differently. We look to the balance of the account at date of marriage, the amounts contributed during marriage, and the market increase or decrease of each amount as of the date o division.

In both cases, the community interest is divided equally. In the first instance, it will be dividd by having the plan send the non-participant his or her share directly to him or her, each month. In the second instance, it will normally be in the form of having the non-participant's share sent directly in full to a "one time rollover IRA" in the non-participant's name.

There are also special rules for direct enforcement of the division of military retirements. Generally, DFAS will not send a direct payment unless the non-participant share represents at least 25% of the total retirement. Military retirements can also be problematic when the retiree receives part or all of his/her retirement in the form of disability (Disability Waiver), since disability payments are normally considered wholly the separate property of the person entitled to receive that benefit.

Private pensions will require what is called a Qualified Domestic Relations Order, or QDRO for short. These need to be prepared and served on the plans, as well as Department of Defense forms needed to divide military pensions. Correct court orders also need to be served on non-private (public) plans through the Plan Administrators, such as PERS, STRS, various law enforcement agencies and other public pension plans.

Also an issue will be the survivor benefit election (SBP) and which party will pay for that benefit. Complicating issues can also be found where one spouse elects to "buy credits" in a defined benefit plan.


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Generally, debts incurred during the marriage are community obligations. This includes credit card bills, even if the credit card is in one name only. Student loans are an important exception because they are considered separate property debts. Community property possessions and community property debts are divided equally unless both spouses agree to an unequal division in writing. If spouses can't agree on the division of debts and possessions, a judge makes that decision.
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