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Pension, Divorce and the Defined Benefit Plan
 Information Provided by: Pension Appraisers, Inc.Key Points
This is a plan set up by a company, union, or individual that provides a participant with a monthly income for life upon retirement:
Examples: IBM Retirement Plan, AT&T Pension Plan, Bricklayers Pension Fund-Local 21. When a QDRO is drafted for this type of plan, benefits may commence to the Alternate Payee when the Participant reaches his/her earliest retirement age or when he/she actually retires or at any time in between. The benefit is distributed in monthly payments for either the lifetime of the Participant or the Alternate Payee.
Some Key Facts to Remember:
The Alternate Payee typically cannot be awarded a lump sum dollar amount. Any benefit to be awarded to an Alternate Payee must be stated in terms of a monthly amount. If it is the intent of the parties that the Alternate Payee receive benefits for her lifetime, it is not always necessary for the Participant to elect a "Joint & Survivor" annuity. Some plans will convert the Alternate Payee's share of the Participant's benefit into a benefit based on her lifetime.
Information Provided by: Pension Appraisers, Inc.
Suggested Reading
Resources & Tools
WIFE’S DISADVANTAGE -- Women of all ages often go into divorces on a less equal footing than their husbands and, therefore, must pay particular attention to the long-term consequences of the division of the marital estate. Women may enter and leave the work force to the demands of child rearing, which lowers their contribution to their own pension plans (if they have them), and they may, for the same reason, juggle low-paying, part-time jobs that together yield a living wage but one without benefits and certainly no pension.
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