Divorce, QDRO'S and retirement income: 5 THINGS YOU MUST KNOW

1. Generally your retirement income is marital property and if you divorce, to the extent the income was earned, accrued or vested during your marriage you will likely have to share it with your spouse. This includes not just real estate but retirement income as well, specifically pensions (for purposes of this post.)
2. QDRO is an acronym for qualified Domestic Relations Order and it is usually (but not always) used in the context of retirement income; and for figuring out the formula for how much each spouse will get, say, from a pension.
In New York, for example, the formula is called the Majauskas formula and there is a lot of information and case law on that. We wrote about that briefly here
3. If your spouse dies before he or she retires, unless the QDRO or your stipulation of settlement specifically says you will get a share of the proceeds, you will not get anything. The QDRO has to say there is a survivor benefit.
4. If the QDRO violates the actual pension plan rules, even if  a judge has signed a judgment of divorce and it says you get a share of the pension, if what it says in the QDRO does not comply with the actual pension plan, you get nothing.
5. Usually retirement income that comes from pensions is a form of “deferred compensation.” So the theory behind why you get a portion of your spouses pension is that it  probably vested during your marriage. Only that portion that vests during the marriage will be payable, in part, to the non-earner spouse.
For more on pensions, click here.
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Originally published feb 23, 2010