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Equitable distribution alternatives to the Majauskas formula

by | Oct 24, 2018 | Division Of Pensions

When you navigate your way through a New York divorce, determining how you and your one-time partner plan to split your shared assets is one of the most important matters to address. Aside from your shared home, pension benefits you or your spouse earned over the course of your marriage will also come into play.

You have several options at your disposal in terms of dividing them between you. In most cases, divorcing couples who must divide up pension benefits do so using what is known as the Majauskas formula.

Understanding the Majauskas formula

Essentially, the Majauskas formula means you and your soon-to-be-former spouse can divide pension benefits by multiplying the years of service credit accrued during the marriage by 50 percent and dividing that figure by the total service credit had at retirement. While this may be the most common method of dividing pension amid divorce, it is not your only option.

Alternatives to using the Majauska formula

Should you decide not to rely on the standard Majauskas formula to determine how to divide pension, you may be able to use one of several alternative methods to do so. First, you may decide to divide pension simply by choosing a flat dollar amount. Once you do so, salary fluctuations will no longer factor in, so the amount you decide on will not vary moving forward.

Another possible option involves modifying the Majauskas formula to better suit your needs, and there are a number of areas you and your soon-to-be-former spouse can negotiate when doing so. A third possible option involves having the New York State and Local Retirement System calculate a hypothetical retirement benefit based on salary and service credit as of a certain date, which, in most cases, is the date divorce proceedings begin.

Dividing pension benefits during divorce can prove complicated, but by relying on one of these methods, you may be able to fairly divide said benefits in a manner that appeases both parties.