Your Spouse’s New York State Teacher’s Retirement System Pension is Marital Property
If your spouse was employed by a New York State public school system and earned any part of a pension during the marriage you are probably entitled to share in that pension.
How Much Is Your Share?
Your share is based on a formula, called the “Majauskas Formula”, named after the name of the court case that established the rule. You are what is called the “alternate payee.”
The alternate payee is entitled to a amount that is approximately one half of the amount earned during the marriage.
The actual formula is as follows:
1. number of months of marriage during which your spouse earned a pension.
2. divided by the number of months total during which your spouse earned a pension.
3. times 1/2.
4. times the yearly benefit your spouse is entitled to receive.
As an example: You have been married 20 years and your spouse worked as a teacher for the entire marriage and ten years before that, for a total of 30 years of retirement benefits accrual. Your spouse’s total retirement benefit is $45,000 per year.
You would receive the following:
total months of marriage: 20 years x 12 months = 240 months
total months of service: 30 years x 12 months = 360 months
percentage of retirement benefit that is marital: 240/360 = 67%
You receive 1/2 of 67% of $45,000 = $15,075.
Do I Have to Share My Pension With My Ex-Spouse?
Of course, you are both free to make another deal on this issue; often people swap off different assets in the course of negotiating a divorce settlement.
How Do I Make Sure I Get My Share?
The New York State Teachers Retirement System is exempt from the Employee Retirement Income Security Act (ERISA), which requires a Qualified Domestic Relations Order signed by a Court to distribute your share to you, but does accept a Domestic Relations Order signed by a court, which is essentially the same thing.
What Other Retirement Benefits Am I Entitled To?
In addition to distributing a monthly retirement payment between the two of you, a Domestic Relations Order can also divide a disability retirement allowance, provide a share of certain death benefits to the alternate payee, and require the election of a specific benefit payment at retirement.
The New York State Teacher’s Retirement System will honor a Domestic Relations Order directing the payment to the alternate payee of part of the monthly payment of a pension already in payment status.
Can Divorce Mediation Long Island Make Sure I Get My Share or Do I Have to Go To Court?
It is crucial that the details of the Plan, including the first date your spouse became eligible for benefits under the Plan, the date upon which your eligibility will be determined, and other details, be laid out in your final divorce agreement.
We have a lot of experience with these issues and make sure that they are covered in any divorce that we mediate. To learn about planning your finances in divorce mediation, click here.