pension distribution

[Sokols]

What is the name of your state (only U.S. law)ca
My husband gets half my pension and 401K, He depleted his 401K and penision cashed them out without my permission while divorce was pending?
I calculated my pension cash value as of the date of our separation at 84,000. Would half of that value 42K be his value whether he rolls it into a retirement fund or cashes it out. We have been married 25 years. He claims that the cash value when I retire at 62 is the total funds that will be distributd. How can that be? Who's right.

 

[mistoffolees]

First, if he depleted his 401K while the divorce was pending, you should be able to get credit for that unless it was used for living expenses and legal expenses.

He is entitled to 1/2 of the 401K at the time of filing for divorce or separation. USUALLY, he also gets any gains or losses from that, but it really depends on the exact wording of the agreement. For example, how did you calculate the pension value? There are a lot of values there and it is really best left for someone with actuarial experience rather than calculating it yourself.

If you have an agreement in place, provide the exact wording. if you don't have an agreement in place, you really should have an attorney involved.

And do your best to make sure the distribution occurs quickly. There are countless examples of people who come back years later and wonder why their situation has become complicated.

 

[Sokols]

I had my employer calculate the buy out amount of my pension at the time of separation. I believe he should receive 1/2 of that amount. Is there another formula that I must consider.
I realize that he could cash out his share or leave it in and collect interest but I think it's his own interest on his share not mine. Is that correct?
I was employed for over 20 years with the company and was married at the time I was employed.

 

[Bali Hai]

I had my employer calculate the buy out amount of my pension at the time of separation. I believe he should receive 1/2 of that amount. Is there another formula that I must consider.

Unless your divorce decree says otherwise, he is entitled to half your pension on the legally prescribed date that CA reconizes via a QDRO. If the "time" of separation is valid in CA, then it's the time of separation. It has to be legal, just saying we separated 5 years ago for instance won't cut it.

I realize that he could cash out his share or leave it in and collect interest but I think it's his own interest on his share not mine. Is that correct?
I was employed for over 20 years with the company and was married at the time I was employed.

When the QDRO is executed, usually what happens is his amount is split into a separate account in his name.

 

[Sokols]

that is what I thought. Would that amount be based on the initial cash buy out value lets say at the time of separation the cash value of the pension was 50K. His 1/2 would be based on 25K and whatever he does with that share.. or is his entitlement more?

 

[mistoffolees]

that is what I thought. Would that amount be based on the initial cash buy out value lets say at the time of separation the cash value of the pension was 50K. His 1/2 would be based on 25K and whatever he does with that share.. or is his entitlement more?

It really depends on the situation.

If it's a defined contribution plan like a 401K, he gets 1/2 of the value at the time of the divorce. You simply have a QDRO split the account in half.

If it's a defined benefit plan, it's far more complicated. Typically, you can't simply take the money out until you retire. He would be entitled to 1/2 of the marital value - but wouldn't get that money until retirement. He would probably get the growth on the marital portion, though. You really don't want to be calculating that yourself. Get an accountant to do it.

 

[Sokols]

pension caluculation

this is confusing to me. Marital Pension contribution.
So his share of the growth on the pension isn't based on 1/2 of the pension $ amount at the time of separation. He can still more of the entire amount?

 

[Bali Hai]

this is confusing to me. Marital Pension contribution.
So his share of the growth on the pension isn't based on 1/2 of the pension $ amount at the time of separation. He can still more of the entire amount?

Yeap, that's what I interpret Misto's response to be.

 

[mistoffolees]

this is confusing to me. Marital Pension contribution.
So his share of the growth on the pension isn't based on 1/2 of the pension $ amount at the time of separation. He can still more of the entire amount?

As I said, it's complicated and you really need an attorney or accountant to go through it.

The principle, though, is simple. Let's say his share was worth $10,000 today, but he can't withdraw it until you retire in 2020. He would be entitled to more than $10 K because if he had that money now, he could invest it and it would grow.

Since you haven't given any details of what your plan looks like, it's impossible to give any more detail.

 

[Bali Hai]

As I said, it's complicated and you really need an attorney or accountant to go through it.

The principle, though, is simple. Let's say his share was worth $10,000 today, but he can't withdraw it until you retire in 2020. He would be entitled to more than $10 K because if he had that money now, he could invest it and it would grow.

Since you haven't given any details of what your plan looks like, it's impossible to give any more detail.

I must clarify that statement, it may or may not grow.