Will I lose my pension?

Pensions and retirement plans are marital assets, and the portion earned during the marriage will be subject to division in the event of a divorce or legal separation.. A QDRO (Qualified Domestic Relations Order) is the legal document that divides up a qualified pension or retirement account, including 401Ks pursuant to the divorce. The QDRO generally grants the spouse fifty percent of the value that the pension plan accumulated during the marriage, pursuant to the "Majauskas formula". It is a court Order that instructs the plan administrator of the employee spouse's employer to pay the non-employee spouse's share of the plan benefits, and allows the funds in a retirement account to be separated and withdrawn without penalty and deposited into the non-employee spouse's retirement account.

For example, if the participant in a pension plan is married for fifteen years, and has twenty file years of pension contributions, then pursuant to the Majauskas formula, the former non-employee spouse's share at retirement will be 30%, ie .50 x 15/25. Therefore,if the member's pension is $60,000.00 per year upon his retirement, he will receive $42,000.00 per year and the former spouse will receive $18,000.00 per year for 15 years. The number of years of marriage, ie the numerator of the formula (15 years) is based on the length of the marriage, defined as running from the date of the marriage to the date of commencement of the divorce action. It is imperative to be aware that a QDRO must be approved by the participant's retirement plan before the participant dies, otherwise the non-employee ex-spouse's share of the pension benefits may lapse and be forfeited.