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Division of assets and employer pension plan

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kula03

Junior Member
What is the name of your state (only U.S. law)? CA

My employer contributes to a company sponsored pension plan, without any deductions from my salary. Now that I am facing divorce and the stbx wants half of what I have, provided that I worked for the same employer during the course of the marriage, till the separation date and then some, I am wondering if she is entitled to any of the money in the pension plan. I am assuming one way or the other she is, but the problem is, I can not touch that money, either I retire from this company or reach a certain age, which I don't know. If I leave the company prior to retirement, I am not sure if I am entitled to any of this money as I have never questioned it, considering the volatility of the employment anywhere in the US. I assumed it is not there or will not be there when I retire.

Can anybody shed a light on, if she is entitled to half of that money and if she is, should she wait until I am eligible to make withdrawals from it (whic is at least 10-15 years away I presume ?
 


kula03

Junior Member
Are you referring to a QDRO?
Pardon my ignorance but I am not familiar with the term QDRO.

It is a certain amount of money, a percentage of my salary (I think some caps involved) contributed to a plan, above and beyond the money figure written on my employment contract, and managed by the company, without any of my input to how the money in it, is invested or kept. I hope this gives a bit information.

Edit: Okay, I figured the QDRO (google is amazing ain't it ?) term, but my problem is, at the present time, I, myself, can not touch this money to take out distributions or anything as far as I know. How is that going to work out ? I know the QDRO is in order for 401K which I personally control. This is another matter. A chunk of money saved on behalf of me by my employer but I can not get involved with the management of the money till I am at a retirement age.
 
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mistoffolees

Senior Member
Pardon my ignorance but I am not familiar with the term QDRO.

It is a certain amount of money, a percentage of my salary (I think some caps involved) contributed to a plan, above and beyond the money figure written on my employment contract, and managed by the company, without any of my input to how the money in it, is invested or kept. I hope this gives a bit information.
I'd have to see the exact wording of the plan. It IS possible to set up a plan like that so it has value only to an employee and would not be of value to anyone else, but that's complicated and not very likely.

It is very likely that it's going to count as an asset for purposes of divorce. It's something that's of value and is in your name. Why wouldn't that be a marital asset?

The only gray area is in vesting. Are you fully vested? If you are, I'd say with 98% certainty that it's an asset (and it's a marital asset if it was earned during the marriage). If it's not fully vested, only the vested portion may be considered an asset or the judge could order that the current value be split after it vests.

Edit: Okay, I figured the QDRO (google is amazing ain't it ?) term, but my problem is, at the present time, I, myself, can not touch this money to take out distributions or anything as far as I know. How is that going to work out ? I know the QDRO is in order for 401K which I personally control. This is another matter. A chunk of money saved on behalf of me by my employer but I can not get involved with the management of the money till I am at a retirement age.
It's not a QDRO. QDRO is qualified domestic relations order. Basically, if there is a retirement account that needs to be split, a QDRO is the mechanism for splitting it without paying taxes on any pre-tax portions. Essentially, the money is split without having to take a distribution.

This is different. It is some time of profit sharing plan - which might eventually be split USING a QDRO.

At the very least, you will need to disclose it as an asset when you list your assets. An attorney can read the plan docs and tell you whether it's divisible, but I'm betting that it is.
 

LdiJ

Senior Member
Pardon my ignorance but I am not familiar with the term QDRO.

It is a certain amount of money, a percentage of my salary (I think some caps involved) contributed to a plan, above and beyond the money figure written on my employment contract, and managed by the company, without any of my input to how the money in it, is invested or kept. I hope this gives a bit information.

Edit: Okay, I figured the QDRO (google is amazing ain't it ?) term, but my problem is, at the present time, I, myself, can not touch this money to take out distributions or anything as far as I know. How is that going to work out ? I know the QDRO is in order for 401K which I personally control. This is another matter. A chunk of money saved on behalf of me by my employer but I can not get involved with the management of the money till I am at a retirement age.
A great deal will depend on whether or not you are vested where the money is concerned. Whether or not that is guaranteed to be your money, no matter what.

Therefore, you need to find out from your employer. Be honest. Explain that you are getting divorced and you need that information to finalize your property settlement. Ask specifically under what conditions you would NOT eventually receive that money.
 

nextwife

Senior Member
And don't forget that any accrual PRIOR to the marriage needs to be excluded as non marital.

So, for example: you have a value of $10,000 coming into the marriage, and then during the marriage, added another $18000, but that is only 70% vested. Spouse is not entitled to any part of the original $10,000, and now now entitled to 15% of the $18000, and should be entitled to half the remaining 70% if you become vested. But you need to make certain you don't owe it if you never become vested or can never receive it.

You certainly don't want to have to split something you do not end up getting.

As stated, you need to talk with your plan administrator for all the particulars.
 
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