Splitting Up a Pension in a Divorce

Q: What Happens to Their Pensions When a Couple Gets Divorced?

Reading, Pennsylvania divorce attorneys pay special attention to pensions when counseling their clients on dividing marital property. If a pension or retirement account must be divided, it is done by a court order known as a Qualified Domestic Relations Order, or QDRO, which happens at the time of the divorce rather than at the time of retirement.

With twenty percent of marriages ending within the first 5 years and one-third ending within 10 years, splitting pensions in the future may not be as common in divorce cases as it is today. This is especially true considering the drastic reduction in the percentage of private-sector workers who have pensions today as compared to the 1990s – – from 35% to 18%. But as long as there is a pension, it will be addressed in the division of marital property during the divorce.

The laws regarding dividing pensions vary state by state. Unlike the nine community property states where marital assets are divided 50-50, in equitable distribution states like Pennsylvania, marital assets are divided fairly, or equitably, but not necessarily 50-50. In addition, military or government pensions have their own rules. Another factor to consider is what portion of the pension, if any, was earned prior to the marriage as that portion may be considered individual rather than marital property. Finally, if the couple had a prenuptial agreement addressing the pension issue, the terms of the marital agreement will generally prevail.

Sometimes, if both spouses have pensions that are approximately equal, the parties may agree to keep their own instead of laying claim to a portion of the others. If they aren’t equal, couples might consider giving the partner with the lesser or nonexistent pension other joint marital assets (such as the house or other property) to make up for the difference rather than pursuing a QDRO to invade the pension account. 

Contact the Law Office of Gary R. Swavely Today

If you are considering getting divorced in Pennsylvania or have been served with divorce papers, the Law Office of Gary R. Swavely, Jr. can help you. Contact us today to discuss your family situation.

From our office in Reading, Pennsylvania we’ve been helping the families of Berks County and the surrounding counties for over 25 years in all aspects of family law.