Dividing Retirement Plans
1. In a 401(k)-like plan, the amount of contributions made between the marriage and separation, and any earnings, plus earnings after the separation and before trial, will be community property.
2. With a typical pension plan, the non-employee spouse can elect to get a portion of the benefits when their ex-spouse retires. Or they can choose to get the money now and receive the present value of half the community interest in the plan.
The amount attributable to community property is the proportion of the time married to the total employment multiplied by the benefits payable.
A pension can be more valuable than any other asset acquired during the marriage or domestic partnership, including a house. It may be worth more than all of the other assets put together.
It is a good idea to have a lawyer’s help any time you have a valuable asset, but this is even more important when you are dealing with a pension. The reason is that special rules apply to pensions. These are very technical and do not apply to any other kind of asset.
If you are a woman, it may be helpful to understand How Divorcing Women Should Handle Retirement Accounts And Pension Plans.