RSSWhen spouses divorce in New York, determining each spouse’s rights to access pensions and other retirement accounts can be complex. Although New York’s Domestic Relations Law views pensions as marital property, experienced Long Island divorce attorneys are familiar with the many ways in which sorting out pension and retirement rights can complicate the divorce process. Working with an experienced lawyer is one way to ensure the process goes more smoothly.
Retirement plans are categorized as “qualified” if the plan is covered by the Employee Retirement Income Security Act (ERISA) or as “non-qualified” if the plan is not covered by ERISA. A qualified plan is divided during a New York divorce by means of a Qualified Domestic Relations Order, or QDRO.
In 1984, the New York Court of Appeals set the formula for dividing retirement accounts in a QDRO. Known as the “Majauskas formula” after the case in which it was articulated, the formula calculates the share of retirement account to which the non-employee spouse is entitled as follows:
(Years of service credit accrued during the marriage) divided by (Total service credit at time of retirement) x .50
For example, suppose that the participating spouse accrued 15 years of service credit during the marriage, and earned 30 years of total service credit by the time he or she retired. The former spouse’s share of the retirement plan will then be 25 percent of the total pension.
Other equitable distribution options include paying a flat dollar amount or equitably distributing other parts of the marital property in lieu of sharing out the pension. Your attorney can help you decide which option best protects your interests.