You and your spouse are getting divorced in New York and you need to split up your pension. You know that your spouse is entitled to some of it, but how much?
The court can use different formulas to reach a decision. For instance, some couples just agree on a flat dollar payout at the beginning. You pay your spouse that total and it's over.
However, since this can be very costly up front, it's common to split up each individual payment. To do this, the courts will often use the Majauskas Formula.
This formula essentially takes the years of work toward that pension that were put in during the marriage and divides them by the total years worked. It then multiplies this by 50 percent. This way, your ex is only getting half of the pension for the time you were actually together, not time you put in before the marriage or after the divorce.
For instance, perhaps you worked for 30 years before retiring. You were only married for 15 years, however, while employed for that company. Your ex wouldn't get half of each payment. He or she would get just 25 percent of those monthly payments, because that's the end result of dividing 15 years by 30 years and then cutting the result in half.
Pension plans are incredibly valuable. It's very important to understand your rights on either side of this relationship. You also need to know how qualified domestic relations orders (QDROs) work, as these are the legal orders that technically stipulate how much has to be paid.
Source: Office of the New York State Comptroller, "The Ex-spouse’s Share," accessed Nov. 17, 2017