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Pension, Divorce and the Defined Contribution Plan
 Information Provided by: Pension Appraisers, Inc.Key Points
This is a private tax deferred savings plan set up by a company or individual that will provide an income to a participant upon retirement:
Examples: Any Thrift Savings Plan, Profit Sharing Plan, Employee Stock Ownership Plan sponsored by a company, or John Doe IRA Account #123456 Benefits may be distributed in a lump-sum payment to the Alternate Payee immediately following qualification of the Order, when the Participant actually retires or at any other time as permitted by the plan.
Some Key Facts to Remember:
Once the plan distributes the lump sum payment to the Alternate Payee, the Alternate Payee must roll over the money into an IRA Account or another similar entity or he/she could be assessed a significant penalty. (Could be 20% or more!)
Information Provided by: Pension Appraisers, Inc.
Suggested Reading
Resources & Tools
MANY MODELS -- Pension and retirement plans come in a bewildering array, with many diverse provisions; however, the two basic models are: the defined benefit or defined contribution. The defined benefit plan is generally a retirement annuity, wherein the employee contributes nothing and the employer sets aside benefits for all employees in a pool; the defined contribution plan is an individual or separate account in the employee-spouse's name, whereby he or she contributes pretax dollars to his or her account that are matched to a certain amount by the employer's contribution.
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