Many married New York residents also work, saving up retirement and pension benefits for the day they plan to retire. While the working spouse is married, these benefits are considered “marital property.” This means that they must be divided equitably if the couple decides to divorce, just as other marital assets are divided.
Typically, retirement accounts and pensions are divided in New York according to a mathematical formula known as the “Majauskas formula.” The Majauskas formula takes the time contributing to the plan and divides it by the time married, and gives the non-titled spouse 50 percent of the amount. However, the court in a divorce case may require the funds to be divided according to a different formula, if doing so will ensure an “equitable” distribution of marital assets between the divorcing spouses.
In order to distribute pension and retirement funds to a spouse or former spouse of the worker who earned them (other than employees of the state of New York), a Qualified Domestic Relations Order (QDRO) must be issued by the Court. The process requires first that the parties agree on the distribution or the court orders the distribution after trial, that a proposed QDRO is approved by the plan administrator, and then, the Court will sign the QDRO and it can be forwarded to the plan administrator to cleave or separate the non-titled spouse’s share of the account. Important issues must be considered before settlement such as the survivor benefit, possible separate interest QDROs and similar concerns.
For New York State and government employees, the plan administrator is New York’s Office of the State Comptroller, and they require a Domestic Relations Order (DRO) rather than a QDRO. Just like the QDRO, however, the DRO provides the formula the court requires the office to use when calculating what share of the pension funds go to each spouse. For police officers and firefighters, many times the employee will max out overtime the last few years before retirement to build up the retirement amount; many times an agreement can be crafted that does not include the spike in the income for determining the alternate beneficiary spousal share.
Although you have the right to an equitable share of a spouse’s pension or retirement funds, you may not be able to access this share until your former spouse actually retires, or reaches retirement age, depending on the type of find and type of QDRO. New York law also prevents you from leaving the share to a beneficiary if you die before your former spouse actually retires. Your experienced Long Island divorce and pension rights lawyer at the Law Offices of Paul A. Boronow, PC can help you understand how the details of retirement and pension rules apply to your specific situation and properly protect your interests.