Q: Will I Be Entitled to My Spouse’s Pension if We Divorce?
Pensions are treated similarly to retirement accounts in a divorce. This means portions of the pension that accrued during the years a couple was married are assets that are subject to division when a couple divorces. Generally, spouses evenly split retirement or pension amounts that accrued during marriage. Thus, the shorter your marriage, the less likely you are going to get a large portion of your spouse’s pension.
Your state’s property division laws will determine how pensions are divided. Some states award a spouse one-half of the other’s pension. In other states, a divorcing spouse isn’t entitled to any of a spouse’s pension benefits. Contact a local family law attorney with questions about pension rules in your area.
Q: What Happens if We Divorce Before My Spouse’s Pension Kicks In?
The timing of your separation or divorce won’t typically affect whether or not you are entitled to a spouse’s pension. For example, you may have a claim to your spouse’s retirement account even if neither of you have retired at the time of your divorce. However, you may not be eligible to receive portions of a spouse’s pension if your spouse doesn’t qualify for a pension at the time of your divorce or you weren’t married during the years your spouse’s pension accrued.
Q: When Will I Be Entitled to Receive Funds From My Spouse’s Pension?
A court will issue a Qualified Domestic Relations Order (“QDRO”) that directs a pension plan administrator to divide the account according to your divorce decree. Any pension funds awarded to you in the divorce will be disbursed by the pension administrator as soon as possible or as indicated in the QDRO.
QDROs can take different forms and may divide pension accounts differently depending on the length of your marriage, both spouses’ contributions, and/or your state's laws. However, you don’t have to wait for your spouse to retire to receive retirement funds. Under a QDRO, the receiving spouse can obtain those funds without early withdrawal penalties, but typically you’ll have to reinvest those funds in a 401k or IRA of your own. In some situations, pensions don’t vest until a certain point. If you're in this situation, you won’t receive your spouse’s pension funds until they fully vest.
Q: Will Payments I Receive From My Spouse’s Pension Affect Child Support?
Yes, depending on where you live. Child support is based largely on parents’ income. If your state allows “double counting,” meaning it counts pension payments as both an asset and income, then your child support can be affected. If you’re the parent who receives child support payments, then your own pension payments can lower the amount of child support you receive. Alternatively, if you’re the parent who pays child support, and you receive pension payments, your child support obligation may increase because your income has increased.