Retirement benefits are considered community property in California. This rule allows CalPERS benefits to be divided upon dissolution of marriage, registered domestic partnership or legal separation. The community property in CalPERS includes contributions you made and the service credit you accrued and/or purchased during your marriage or domestic partnership.
As with any community property, your former spouse may be entitled to half of your pension benefit. Unless you have an agreement in your divorce to retain your full pension, your spouse or her attorney may place a community property claim against your pension at any time.
Not many divorce attorneys take cases involving CalPERS property division. To learn more about how a divorce attorney can help you negotiate and secure a QDRO call us at (916) 250-1610 to schedule a $200 one-hour consultation.
Answering a Claim Against Your CalPERS
Understandably, you want to resolve any issues as soon as possible as they will affect your pension and when you will receive benefits. The first step is to submit a Qualified Domestic Relations Order (QDRO) to CalPERS outlining how the CalPERS benefits will be divided.
NOTE – this website and its articles do not constitute legal advice. Seek representation from a divorce attorney with experience in QDRO’s and CalPERS property division.
Once CalPERS approves the QDRO, the order can be filled with the court by your divorce attorney. Send CalPERS a copy of the filed QDRO. CalPERS can take up to 60 days to review the filed QDRO as they need to ensure the language is acceptable.
Pension benefits will not be released to you or your former spouse until the claim is resolved. If you have retired, half of your monthly allowance is held until the claim is resolved. Once CalPERS determines that the filed QDRO is acceptable, the claim is resolved and your benefits will be made available to you and your former spouse, if still eligible. The sooner you act after you receive the claim, the faster you can start to receive your full pension.
Negotiating your Pension with Other Assets
Before you go into panic mode, your spouse’s share of your pension is based on a time-rule formula. A good example is outlined in the CALPERS site where a $7,500 monthly pension in 12-year marriage resulted in only a $1,800 per month community property interest payable to the former spouse.
In many cases, this can be reduced further or eliminated if you are flexible in negotiating other valuable assets such as property, vehicles or other jewelry. It is advisable to seek the advice of a family law attorney if you are facing a claim against your CalPERS and want to protect your pension and review your legal options. The money you invest in a CalPERS divorce attorney can save you a significant amount of money and frustration in dealing with a claim against your pension.
When it comes to negotiating pension benefits, it is best to consult with a family law attorney in California. Together you can review your rights and create a legal strategy that will be fair and serve in your best interest.
Valuation of Pension Plans
Pension plans fall into two categories: defined benefit pension plans and defined contribution pension plans. Under defined benefit pension plans, the value of the plan does not depend solely on the contributions made. Instead, it is based on a combination of factors such as:
- Highest income level achieved
- Years of service at retirement, and
- Age of retirement
For a defined contribution pension plan, the following are the basis for its value:
- The amount of contributions made between the marriage and separation, plus accruals thereon; and
- All accruals thereon between the date of separation and trial of the issue.