Dividing Pension Plans In A Divorce

By Gerald A. Maggio, Esq.

divorce mediators Orange County; California Divorce MediatorsSimilar to the rest of your property and assets, your retirement plan requires proper division post a legal separation or divorce. Although you are entitled to reaping the benefits of your retirement plan only when you actually retire from your job, the division of the balance in the plan may be divided between you and your spouse in case of a divorce long before your retirement. The state laws of California have adequate provisions for dealing with the splitting of your pension plans, just like the property owned by you and your spouse.

Community versus separate property 

As per the family law of California, the property owned separately by a couple before they get married is considered as separate property which is not subject to any division in the event of a divorce. This implies that the monetary contributions you might have made to your pension plan before your marriage or after its dissolution will be considered as separate property which will not be split up in a divorce. However, the contributions that you made to your retirement fund during your marriage will be referred to as community property, which is considered to be jointly owned by you and your spouse and will be subject to division in the event of a divorce.

Usually, the division of pension plans is usually carried out by one of the two methods: by a Qualified Domestic Relations Order or by a buy-out.

Reservation of jurisdiction 

The most widely accepted method of pension plan division, the reservation of jurisdiction employs a court order which states that the other spouse will be granted a specific percentage of each installment of the pension received by the employed partner post his retirement. The percentage is generally obtained by dividing the married years by the number of years for which the employed spouse has been contributing to the pension plan. The figure obtained as a result is considered as the community property portion of the pension plan. 


A rarer alternative of pension plan division, the cash out approach incorporates actuarial evaluation of the retirement fund. An actuary is a financial expert who deals with statistical evaluations of pensions, annuities and insurance policies. Through this method, the actuary first reviews the terms and clauses of the pension plan and then determines the ‘present value’ of the community property portion of it. Through this method, the entire pension plan is granted to the employed spouse and the other spouse is entitled with the acquisition of other community assets which are of equivalent value.

The division of pension plan post a divorce can be a complex issue to deal with. It is advisable to consult a professional attorney who is well aware of the intricacies of such cases.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation