Division of Pensions in Divorce Mediation | Pensions and 401(k)s are Marital Assets if Earned During the Marriage.
While talking about division of pensions in divorce mediation, how often have I heard a client say “I worked all those hours.” I struggled through the commute, worked on Saturdays”. Many a police officer has said to me “I risked my life every day on the mean streets of New York.” “Why should my wife (or husband) get a share of my pension?”
The answer is really simple. New York State law says that the portion of any retirement asset is marital property. And that includes a pension equivalent like a 401(k) or 403(b).
Division of Pensions in Divorce Mediation | So, Does that Mean That My Spouse Gets Half of My Retirement?
No, that is not what is means. The first thing we need to figure out is the marital portion. How much of your retirement assets was earned during the marriage? If you earned ten years worth of a pension, then got married, then divorced ten years later, 1/2 of your pension is marital property.
You earned retirement benefits for 20 years. You were married for ten of those years. So 1/2 of retirement benefits is marital. But that is only the first part of the calculation. You have probably read about the Majauskas formula. That is what it is.
Typically, the marital portion of the pension is split 50/50.
Once your know how much of the pension is marital you can figure out the distribution. Most people I speak with assume it is 50/50. That is not what the law says. It says “equitable” not “equal”. Equitable means what is fair considering all the factors.
In the real world I have rarely seen a court award other than 50/50. It can happen, but you would have to spend a lot of money to find out. For the most part, in divorce mediation, people share the marital portion of the pension equally. Or they use that number in trading assets with each other. They do this when they split up the assets and liabilities of the marriage.