Pensions are divisible pursuant to divorce because they are considered property. The two most common methods of distributing retirement benefits in divorce are the Immediate Offset Method and the Deferred Distribution Method. The major difference between the Immediate Offset Method and the Deferred Distribution Method is the time at which the division of benefits occurs.

The Deferred Distribution Method does not provide for an immediate division of the benefits. Instead, the court determines the percentage interest or specific dollar amount to be awarded to the non-pensionholder, and orders that the non-pensionholder receive this award when the pensionholder is eligible to receive retirement benefits. In most cases, the pensionholder will not be eligible to receive retirement benefits until a date some time in the future. Therefore, distribution of the benefits is deferred until a point some time in the future. This method of distribution is accomplished by a Court Order (example - Qualified Domestic Relations Order). A Domestic Relations Order is a written, legal document that is filed with the Pension Plan Administrator. It explains to the Plan Administrator that the parties were married and got divorced and that part of the retirement benefits are to be paid to the non-pensionholder spouse. It further outlines the terms of the parties’ agreement regarding the amount of the award and the details pertaining to the award.

If the parties are trying to accomplish a deferred distribution of the pension benefit, Pension Appraisers, Inc. offers in-house and online Order drafting services. An Order will be drafted pursuant to the terms of the governing document (the property or marital settlement agreement or the divorce decree).

Read more information on the Immediate Offset Method.

QDRO Preparation Services (2 Options)

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