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What will happen to my pension after a divorce?

On Behalf of | Nov 1, 2021 | Divorce |

Police officers, firefighters and other public servants are usually eligible for a retirement pension.

Although this benefit has expanded over the years in many ways, New York City’s employees have been eligible for these pensions for a long time. A person’s role in the City’s government determines which of the City’s five pension programs the person qualifies for.

Public servants who work in other communities around New York may also draw pensions.

Pensions are generally considered marital property subject to division

In a divorce, the value of a municipal employee’s pension may be considered marital property which the court is supposed to divide equitably.

In many cases, the former spouse’s equitable share of a pension will be half the value of the pension which the public employee accrued while the couple was married. In other words, a city employee will keep outright that portion of the pension which he or she earned before or after his or her marriage to the former spouse.

However, it is important to remember that this formula is not set in stone. Both the couple and the courts are able to modify it or even to ignore it and come up with a different formula.

Dividing a pension can be hard to do in practice

Moreover, splitting a pension with one’s ex-spouse can be a difficult thing to do in practice. In some cases, for example, it may be important to figure out the present-day lump sum value of a retirement pension. Usually, a financial expert will have to help with this step.

Assuming the couple decides to divide the pension instead of negotiating some other solution, one of them will need to prepare a proper Domestic Relations Order so that the administrator of the plan has authority to divide the pension without adverse tax consequences.

 

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