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Monmouth County QDRO Attorney- Awarding of Survivorship Benefits for Non-Pensioner Spouses

Posted by Unknown | Apr 06, 2020 | 0 Comments

Retirement plans, including pension plans are subject to equitable distribution, but the portion that is subject to division is based on the contributions that were made during the marriage.  This guideline is essential in cases where spouses were married for a short time, or if most of the pensioner spouse's contributions were made outside of the marriage.  The duration of time factors into survivorship benefits as well, which refers to distributions that would normally be paid out to the surviving spouse of the pensioner.  If those spouses are divorcing, then it often falls on the courts to decide if the non-pensioner should be awarded survivorship benefits.

The courts make their determination based on many of the same factors that are considered in the equitable distribution of a pension.  These factors include: how long was the marriage; are there assets that can awarded to offset the non-pensioner's share of the pension; and will the spouse be awarded his or her portion as a deferred distribution.  If deferred distribution is the appropriate method, the courts have to consider one very important outcome.  The portion that the pensioner spouse receives will be reduced in order to compensate for the benefits that the non-pensioner will continue to receive in the event of the pensioner's death.  Whether this is “equitable” or not hinges on numerous factors such as: 1) the age and health of the parties; 2) the length of the anticipated years of service in the pension plan; 3) the impact of the survival benefits on the benefits received; and 4) the availability of other assets to fund the pensioner's retirement.  Life insurance factors in as well, since the non-pensioner can be made a beneficiary on that policy rather than the pension.

Factors one and two receive the most consideration in the majority of cases, especially in relatively short marriages where most of the contributions were made before the marriage.  In that case, the courts are likely to rule that the pensioner should receive the full benefit of his or her benefits, hence a reduction via survivorship benefits would be unfair.  However, each request is viewed on a case-by-case basis, so it's crucial to look at any and all relevant factors.  For example, a non-pensioner spouse who is profoundly disabled, and has been for most or all of the marriage may need the extra insurance of survivorship benefits.  The same can be said for marriages with very little assets beyond the pension plan, though once again, life insurance may be deemed equitable coverage in such cases.  Since each situation is different, it's best to consult an attorney about your equitable distribution rights and legal options.  Your attorney may also recommend financial experts such as forensic accountants to calculate the current value of the pension, as well as the estimated value should your spouse die prior to retirement.  For more information on pension valuations in a New Jersey divorce, please speak with the divorce attorneys of Villani & DeLuca, P.C

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Vincent DeLuca, Esq.

As a founding partner at Villani & DeLuca, Vincent DeLuca is one of only a few Certified Matrimonial Law Attorney in Ocean County, New Jersey. Mr. DeLuca has helped many clients navigate the delicate details of their own divorce. Mr. DeLuca is also a trained divorce mediator and collaborative divorce attorney. Call today at (732) 751-4991 to speak to Mr. DeLuca or one of our experienced NJ Divorce Lawyers.