Generate Pension Report Create Account Log In How It Works Online Demo Sample Report Download Pension Form Print Pension Form QDRO Request Forms FREE Download Book Basics of Pensions In Depth Analysis Special Issues Actuarial Standards Sample Authorizations Pension FAQs QDRO FAQs Glossary Join Our Mailing List About Our Company About Our Analysts Contact Us Phone Consultations Our Fee Schedule Testimony Your Privacy Security Terms of Use Customer Support	Junior Associate: Question? How do you actually distribute the marital portion of a pension? Senior Law Partner: Answer There are two competing methods of division, each with its own rules. One is called the "Immediate Offset Method" and the other is known as the "Deferred Distribution Method". The major difference between these two methods is the time at which division is accomplished. Under the immediate offset method, a pension appraiser determines the present value of the retirement benefits. The non-employee spouse is awarded his or her share of the benefits as an immediate lump-sum award of cash or other property (i.e. additional equity in the marital home, a time-share purchased during the marriage, etc.). Under the deferred distribution method, by contrast, there is no immediate division of the retirement benefits. Instead, the non-employee spouse is awarded a percentage share or specific dollar sum from the employee's pension when the employee is entitled to receive his or her benefit directly from the Plan. Since the employee spouse in most cases will not begin receiving benefits until some point in the future, the actual division of the pension under this method is deferred until the employee spouse retires. This form of distribution is accomplished by using a court order or a Qualified Domestic Relations Order (QDRO). The court order or QDRO is a written set of instructions that explains to the pension plan administrator that a portion of the pension has been determined to be marital property subject to distribution in the divorce. The QDRO will provide specific instructions as to the manner in which this pension is to be divided. For example, let's assume that on the date your parents marriage ended, your father was entitled to receive $1,000 a month at retirement. The coverture fraction, of this benefit is determined by time, to be 33%. This means that 33% of the $1,000 was earned during the marriage, therefore, the marital portion of your father's $1,000 a month pension benefit is $330. This is the amount your mother and father will split. Let's further assume that it has been decided that your parents will divide their marital property on a 50/50 basis, due to the longevity of their marriage. Your mother would be entitled to $165 of the marital portion of your father's benefit, and your father would receive $165 of the marital portion plus $670 which was his non-marital portion. Therefore, the QDRO would be drafted by either our law firm or a pension expert to provide instructions for the plan administrator to pay directly to your mother $165 per month beginning when your father actually retires or is eligible to retire. Previous Page Next Page (6 of 14)

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