Am I entitled to any of my husband's pension since we are divorcing?

Full question:

I am currently separated from my husband and I am seeking to get a divorce from him. He is receiving a pension from the Police Department. Am I entitled to receive half of his pension as a divorce settlement?

• Category: Divorce
• Subcategory: Property Settlements
• Date: 04/07/2025
• State: New York

Answer:

In general, pensions and retirement funds come under one of two
categories: defined contribution or defined benefit plans.

Defined Contribution Plans

A defined contribution plan is one such as an IRA, Simple IRA, 401k, SEP
Account, and so forth where the plan participant contributes somewhat set
amounts to those funds. Those funds do not pay out guaranteed sums of
money. Rather, at any given time, the plan participant can access their
account information and determine what is in their account. The plan
participant generally contributes to these forms of plans and the participant's
employer may also contribute sums to these plans on a periodic or other
basis. Dividing these plans does not involve tremendous difficulties. If done
with a Qualified Domestic Relations Order, the sums in the plan are divided in
whatever proportion is requested by the parties in their separation
agreement, and the non participating spouse sets up a rollover IRA into
which that spouses funds are deposited. The transfer is not taxable.

Two issues must be addressed in the Separation Agreement with regard to
these plans. The first is what happens to sums that may be due from the
employer but not yet contributed. For example, if you and your spouse
decide on February 1st to enter into a separation agreement and to equally
divide the monies in a 401k, you need to consider whether there are monies
due to be paid into that fund from the prior tax year. Many employers make
those payments in the subsequent tax year. If you simply state that you are
dividing what is in the account, the non participating spouse may be short
changed.

The second issue is the consideration of appreciation or depreciation to a
fund after the date of agreement. For example, if a 401k contains $40,000
and you and your spouse agree to equally divide that fund, you should not
simply agree to give or take $20,000 as a one half share. That fund may
significantly appreciate or depreciate before a Qualified Domestic Relations
Order can be prepared, submitted to the Court and signed, and submitted to
the Plan and effected. Thus, your agreement must clearly state what will
happen to appreciation depreciation to that fund in the interim period.
A note of caution which is applicable to both defined contribution and defined
benefit plans. If your separation agreement does not say that you get it,
you do not get it. Thus, you cannot ask for appreciation on your funds after
the fact. Those issues must be discussed and agreed upon before your
separation agreement is finalized.

Defined Benefit Plan

A defined benefit plan is more like a traditional pension which provides a set
pension payment on a monthly basis at the time of retirement. The plan
participant may or may not contribute to this form of plan. These plans
often provide many benefits in addition to the monthly payment paid at the
time of retirement. For example, they may provide a pre-retirement death
benefit, a post retirement death benefit, a single life annuity, a joint and
survivor annuity, early retirement benefits, and more. Each plan has it's own
range of benefits and each plan has it's own requirements for the
preparation of a Qualified Domestic Relations Order.

The benefits that are available and the impact if those benefits are not
preserved for a non participating spouse are significant in the realm of
defined benefit plans. More important, if the benefits that are required by the
non participating spouse are not set forth in the separation agreement, they
can not be obtained in a Qualified Domestic Relations Order.