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How are pensions divided in a divorce?

Most people in New York would like to retire at some point in time. However, in order to do that they need to save money while they are working and earning a paycheck. Many people have 401(k)s, IRAs and other types of individual retirement accounts. Others have pensions which pay a benefit to the worker, generally based on years of service. Pensions are somewhat unique in the fact that the worker generally cannot receive any of the money until they retire, unlike other individual retirement accounts.

This is really not that big of an issue for the most part, but it can create complications when people are going through a divorce. Retirement accounts and funds are considered a marital asset and must be divided in a divorce. IRAs and 401(k)s are slightly easier to divide because it is easy to determine the actual dollar amount in the account at the time of the divorce. Then people are able to divide that amount accordingly and each spouse ends up with their share of the money in the account.

Pensions do not have a specific dollar amount that can be divided, especially when the person is still working. The final benefit amount is still to be determined. So, in order to divide a pension, a formula is used to determine the portion each spouse will receive once the benefit starts being paid out. The formula is the total number of years that the couple was married divided by the total number of years the person worked and contributed to the pension. Then, multiply that number by 50 percent to determine each spouse's share of the pension benefit.

While that is the most common way of dividing a pension in a divorce in New York, the couple does have other options and can reach other agreements. This is just one of many issues that a couple may encounter during asset division, especially during a high asset divorce. Simply determining the value of certain assets can be difficult and that is before any division takes place.

Source:, "Divorce and Your Benefits" accessed on Jan. 15, 2018

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