Some employers still offer old-fashioned defined benefit pension plans to their employees. A divorce settlement may provide an employee’s ex-spouse with a present or future interest in the lifetime pension payments. To determine the marital portion of the pension it may be necessary to hire a pension consultant. This article provides useful information regarding the division of the marital portion of pension plans.
Splitting retirement accounts pursuant to a divorce requires a separate agreement, a qualified domestic relations order (QDRO). This agreement may cover a 401(k), 403(b) or a pension plan, must meet specific requirements and must be presented to the retirement plan administrator. Although a QDRO is not needed to split IRA assets, the divorcing parties should consider the timing of division to ensure that it does not produce unwanted tax effects. Additional information regarding QDROs can be found in this article.