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A general question about Pensions and Retirements
I am going through a divorce in which the judge has ordered I pay my soon-be-ex-wife 50% of my pension once I retire. From what I understand, pension is considered personal property acquired through a marriage. Does this mean that the 50% I am ordered to pay be valued at it worth when the decision was made by the judge?
In many Pennsylvania divorce cases, the marital portion of a defined benefit pension is divided between spouses. The division is done pursuant to a mathematical equation that divides the number of years of married employee service by the total number of years of employee service. This fraction, called a coverture fraction, is then multiplied by the total monthly benefit. That figure is then multiplied times the percentage to be paid to the non-employee spouse (known as the Alternate Payee).
For example, if you are retiring from your employer for the last 40 years and you were married for 30 years of the time that you were employed with that employer, 75% of your pension benefit is marital (30 years of married service/40 years of total service). Under this example, if your total monthly benefit is $5,000.00 and your spouse is to receive 50% of the marital portion of that benefit, the formula would look like this:
$5,000.00 x 75% = $3,750.00
$3,750.00 x 50% = $1,875.00
$1,875.00 is the amount that the Alternate Payee (i.e. former spouse) would receive.
Dividing pensions in divorce can be a complicated issue. We offer free telephone consultations and are happy to discuss this issue or any other family law issue in more detail. Please call (717) 502-5000 to schedule a telephone consult.