Considering the importance of retirement planning, along with the dependable nature of a pension plan, it may seem pretty foolish to not fight for your share during the divorce proceedings. You are certainly entitled to do so according to the laws of equitable distribution, which classifies retirement plan contributions made during the marriage as marital properties. Of course, the fact that it's legal doesn't always mean that it's fair to both parties. To your spouse, the idea of you getting a portion of something that he or she has worked for, not to mention something that's in his or her name only, may seem absolutely galling. If you and your spouse are at an impasse over the pension plan, you may be wondering if it would be better to drop the issue altogether.
The answer depends on many practical and personal factors, but a primary consideration would be the length of your marriage. Since New Jersey is an equitable distribution state as opposed to a community property state, your portion would be based only on the contributions that were made during the marriage. Thus, it's less likely that you'll be receiving anything worth fighting for if you've only been married for a few years. On the other hand, if you've been married for 25 or more years, you could be looking at an amount that's close to 50% of the plan, which may be well worth fighting for.
However, it's misleading to think of a pension plan as a form of guaranteed payments. An employer can actually terminate the plan due to financial stress such as bankruptcy, after which you will only get back the portion of the funds that are guaranteed by the employer or the Pension Benefit Guaranty Corporation (PBGC). In addition, neither you or your spouse have any say over how your money is invested, since pension plan investments are completely within the control of the management company chosen by the employer. You should also consider the fact that certain pension plans do not allow for survivorship benefits, which means that you will be cut off from payments should your spouse die before you.
Unfortunately, there are no guarantees on what your finances will look like as you head towards retirement. The good news is that you can plan ahead for many of life's pitfalls by securing the most equitable and practical distribution of your marital properties. Instead of pushing for the pension plan, you could perhaps ask to be named as the beneficiary of the life insurance policy, instead. You could also ask for an exchange of other properties that will increase in value over time, or can be easily liquidated should you ever face financial hardship. Whether you are in private negotiations, or pursuing litigation over a specific property, please consider speaking with the family law attorneys of Villani & DeLuca, P.C. Our lawyers look forward to advising you of your rights and options during a free consultation.
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