State Pension Evaluation Classification

Explicit Classification of Retirement Benefit (SEE BELOW FOR STATE LINKS)

Property division statutes explicitly address the classification of pensions and retirement benefits in Alabama, Alaska, Colorado, Florida, Illinois, Kansas, Kentucky, Massachusetts, Nebraska, New Hampshire, North Carolina, Ohio, Tennessee, Virginia, and Wisconsin.

In Alabama, the trial judge may distribute vested retirement benefits under certain limited circumstances. The statute provides, in pertinent part:

(a) The judge, at his or her discretion may include in the estate of either spouse the present value of any future or current retirement benefits, that a spouse may have a vested interest in or may be receiving on the date the action for divorce is filed, provided that the following conditions are met:

1. The parties have been married for a period of 10 years during which the retirement was being accumulated.
2. The court shall not include in the estate the value of any retirement benefits acquired prior to the marriage including any interest or appreciation of the benefits.
3. The total amount of the retirement benefits payable to the non-covered spouse shall not exceed 50 percent of the retirement benefits that may be considered by the court.

(b) If the court finds in its discretion that any of the covered spouse's retirement benefits should not be distributed to the non-covered spouse, the amount is not payable to the non-covered spouse until the covered spouse begins to receive his or her retirement benefits or reaches the age of 65 years, unless both parties agree to a lump sum settlement of the non-covered spouse's benefits payable in one or more installments.

In Alaska, the trial court may provide for the division of the parties' property, "including retirement benefits, whether joint or separate, acquired only during marriage, in a just manner and without regard to which of the parties is at fault." Further, the court may invade retirement benefits that either spouse acquired before marriage "when the balancing of the equities between the parties requires it . . . ."

The statute in Colorado provides for the division of retirement benefits of public employees only. The Florida statute, in its definition of marital assets, includes "vested and nonvested benefits, rights, and funds accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation and insurance plans; . . ." A separate provision relating to distribution of assets states: "All vested and unvested benefits, rights, and funds accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs are marital assets subject to equitable distribution." TheIllinois statute presumes to be marital property "all pension benefits (including pension benefits under the Illinois Pension Code) acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity of the marriage . . . regardless of which spouse participates in the pension plan." The Kansas statute mandates that the trial court "divide the real and personal property of the parties, including any retirement and pension plans, whether owned by either spouse prior to marriage, acquired by either spouse in the spouse's own right after the marriage or acquired by the spouses' joint efforts, . . ."

The Massachusetts statute provides that in addition to alimony the court may assign to either spouse all or a part of the other spouse's estate including "retirement benefits, military retirement benefits, . . . pension, profit-sharing, annuity, deferred compensation and insurance." The statute in Michigan includes within the marital estate rights in vested pensions, annuities and retirement benefits as well as rights or contingent rights in such assets when they are unvested. The Minnesota statutory definition of marital property includes "vested public or private pension plan benefits or rights" acquired during the marriage. The Supreme Court of Minnesota, in Janssen v. Janssen, held that a nonvested, unmatured pension is marital property within the meaning of the statute. Similarly, the Nebraska statute directs the trial court to include in the distributable marital estate "any pension plans, retirement plans, annuities, and other deferred compensation benefits owned by either party, whether vested or not vested," and the Oregon statute provides that "a retirement plan or pension or an interest therein shall be considered as property."

The New Hampshire statute states that property includes both tangible and intangible assets, both real and personal, and explicitly includes within the definition of intangible property "employment benefits, vested and non-vested pension or other retirement benefits or savings plans." To similar effect is the applicable North Carolina provision's definition of marital property to include "all vested and nonvested pension, retirement, and other deferred compensation rights, and vested and nonvested military pensions eligible under the federal Uniformed Services Former Spouses' Protection Act." The Tennessee statute, also in the definition of marital property, includes "the value of vested pension, retirement or other fringe benefit rights accrued during the period of the marriage." The Virginia statute, which applies a marital property presumption to property acquired by either spouse during the marriage, explicitly includes "pensions, profit-sharing or deferred compensation or retirement plans of whatever nature . . . ." The West Virginia statute defines earnings to include "periodic payments pursuant to a pension or retirement program" and includes earnings within the definition of marital property.

Using an Actuary is what your lawyer may feel that it is necessary to hire a “pension actuary" to value the pension. A pension actuary is a person who is an expert in the technical and mathematical aspects of pensions. An actuary can estimate the amount of the pension your husband is likely to receive in the future, and calculate the current lump sum value of the future monthly pension. The actuary can also help figure your share of the pension, and help you compare different methods of collecting your share. Usually an actuary just provides a written report for your lawyer, but sometimes it is also necessary for the husband's and wife's actuaries to testify in court when the couple cannot agree on what the pension is worth. The fact that there is not just one accepted method of valuing pensions is one of the difficulties in establishing your share of the pension at divorce. 

Contact Pension Evaluators® & QDROs of Troyan Inc® & Associates Group for your pension appraisals at (800) 221-0706.