Division of Pension Plans In A Divorce

By Gerald A. Maggio, Esq.

orange county divorce mediation; California Divorce MediatorsPension plans are usually divided in one of only two ways: “cash out” or by Qualified Domestic Relations orders (QDROs).  The latter is the most common way through which pension plans get handled. Under this scheme, it is ordered by the court that at the time of retirement of the employed spouse, the other one will be the recipient of a percentage of every pension check. This percentage is arrived at by dividing years when the spouses spent together in their once home as wife and husband by total number of all years when the spouse who is employed had participated in pension plan. The result amount of that division is community property percentage of pension plan. To give an example, if a husband has put in 20 years of his monetary contributions to a pension plan, and 10 of the coinciding years he lived with the wife, the share of the pension plan will be about 50 percent. In such a case, the wife will have 25 percent of the pension checks of the husband. 

Money plan 

As per reservation of jurisdiction, the spouse considered a non-employee could elect to receive her or his share of the pension benefits of the employee spouse at earliest time when the employed spouse will retire. It means that in the case of the employed spouse electing not to retire at earliest opportunity, that spouse must pay the non-employed spouse what the latter would have got in case the employed spouse would have retired. To give an example, if the husband becomes eligible to retire at 55, but elects not to retire in that age, his ex-wife could demand that he provides her the amount of money she would have received if he retired during that age. It is to be mentioned that in case the wife selects this option, she will not receive any increases due to higher cost of living after that date.


The 1984 made Federal Retirement Equity Act created “Qualified Domestic Relations Order”. In this system, the court gives orders regarding the retirement plan of the spouse. The Federal law states that the employer must comply with the order terms.  The QDRO preparation is complicated and time consuming. It is also expensive. However, the QDRO is an essential step in dissolution process. A number of companies have been created for the sole aim of making them.

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