Receiving payments from a pension plan is an effective way to ensure you have enough money to get through retirement.
Splitting these payments in a divorce, however, could rob you of the hard-earned benefits if your agreement is not made appropriately.
Do I have to split my pension?
In New York, any pension benefits you earned during your marriage are marital property. You and ex-spouse will, therefore, need to split these payments in a divorce.
How does the split work?
You and your ex may choose to create an agreement between the two of you, without the involvement of the court. However, if the deal is unfair, it's more than likely that you'll end up in court over this in the future.
If you and your ex disagree on how the payments should be split, a judge or court proceeding your case will likely use the Majauskas formula to determine the agreement.
How the Majauskas formula works
To ensure both spouses receive a fair share of pension benefits earned during the marriage, the New York Court of Appeals created the Majauskas formula. The formula gives your spouse 50 percent of the pension after dividing years of service credit during the marriage by total service credit at retirement.
For example, if you had 20 years of service during your marriage and retire with 40 years of total service to your employer, your spouse should receive a quarter of your pension. In mathematical terms, this is half of the product of dividing 20 by 40.
The judge may not use the Majauskas formula
The Majauskas formula is the standard in New York divorce cases. As such, you should generally expect the judge to apply the formula when deciding how to distribute your pension benefits. There are exceptions, however. If you and your spouse reach an agreement that differs from the Majauskas formula, the judge may allow it. You should, however, prepare yourself to argue that the dissolution is fair.
If you are preparing for a divorce, you should be ready to do some significant calculations. If you have a pension, you'll also need to understand how the Majauskas formula affects disbursements following a divorce.
However, with all of your day-to-day responsibilities, figuring this out can be nearly impossible alone. To ensure that you're getting your fair share at the end of the divorce, your best bet is to contact an experienced attorney to guide you through the division of property in your divorce.