How are Pension Plans Divided in a California Divorce?

It is very important that you do everything possible to protect your future financial security as your marriage ends, which means making sure that you have fair access to your own pension and to the funds your spouse has contributed in his or her pension plan. Pension plans have a significant value, especially if you are close to retirement age or if you are already retired. If you get a divorce, pension plans thus must be considered as part of the assets to be divided.

Determining how pension plans are divided in a California divorce is one of the most complex issues couples face. An Irvine, CA divorce and family law attorney can provide assistance with this important issue. Call Brown & Charbonneau, LLP today to learn more about your rights to your own pension fund and your rights to receive a portion of your spouse’s retirement income.

How are Pension Plans Divided in a California Divorce?

Pension plans should be treated in a similar manner to other property. This means if you made contributions to a retirement fund prior to getting married or earned pension benefits before you were wed, the money in the fund belongs to you alone. However, money contributed and earned in a pension fund during the course of your marriage must be treated as community property. This means each spouse is entitled to a share.

It can be very confusing to determine the future value of contributions made to a retirement fund both before and during the marriage, so it is often best for an expert to be consulted to put a value on the pension fund and to determine how much each spouse is entitled to.  Factors including whether the pension plan is a defined benefit plan or a defined contribution plan can make a big difference in what a pension plan is worth and how much each spouse is entitled to receive.

In some situations, pension plans have to actually be joined as a party in the divorce. Unless the pension plan is joined as a party, the court cannot make a ruling that divides up the pension plan’s benefits between the spouses.  California Form FL-318-INFO provides full information on which pension plans have to be made a part of the case for the court to issue a ruling.

Pension plans, unlike other property, also may not simply be split in half. Often, pension plans don’t begin paying out until retirement so the money and benefits can’t just be split up and given to each spouse during the divorce process.  It may also cause a significant tax disadvantage to take money out of a pension plan immediately for purposes of dividing it up during divorce. Courts can use a qualified domestic relations order (QRDO) to explain how the plan should be split among the spouses.

Because of the complexities associated with determining how pension plans are divided in a California divorce, couples should consult with an experienced Irvine family law professional about this issue. Brown & Charbonneau, LLP can provide assistance with the division of a pension plan so you are financially stable after your divorce and during your retirement. Give us a call today to learn more.