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Pension and Retirement Benefits are Subject to Equitable Distribution in Divorce

Retirement benefits of one spouse accumulated during a marriage are subject to equitable distribution in divorce proceedings.

I often represent clients that do not have a complete grasp of the entirety of the marital estate . It not only includes, real estate, household goods, furnishings, stocks, bonds, securities, boats, cars and the like, but it also includes retirement, pension, KEOGH, 401(k)'s and other such plans.

Retirement pension benefits, vested and non-vested, are marital property subject to equitable distribution. Where the employee benefits result from employment during the marriage, they are marital property because the benefits are received in lieu of higher compensation that would have enhanced the marital assets or the marital standard of living.

My Husband's/Wife's pension plan has a employer contribution component, does this count?

Yes, in one case, the Superior Court held that a trial court abused its discretion in calculating the marital portion of a husband's pension based solely on contributions to the pension made by the husband; the court did not consider any contributions to the pension made by the employer. The employer contribution counts in this calculation of what the spouse's plan is worth.

He/She had a retirement plan before we got married, does the whole thing get distributed?

No. Only that portion of the pension attributable to the period commencing with the marriage and ending on the date of separation is marital property. That portion of the pension property that was acquired after the date of final separation should not be subject to equitable distribution. (See my article on valuation of this asset).

If you are involved in a separation or are thinking about divorce, it's important to have an accurate picture of the assets and their value in determining the marital estate. If you need assistance, you may contact Shaffer & Engle Law Offices, LLC at (717) 268-4287.