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How Can You Divide a CalPERS Pension in a Divorce?

Posted by Mariya Furman | Oct 08, 2022

The California Public Employees Retirement System (CalPERS) provides lifetime benefits to its employees and their spouses. If you decide to file for a divorce, you will most likely have questions about how your retirement benefits will be impacted.

In the state of California, all types of retirement benefits are considered community property, also called “marital property. This means that depending on your marital settlement agreement, you could receive up to half of your spouse's CalPERS retirement.

How Can You Divide a CalPERS Pension in a Divorce?
CalPERS pension benefits are community property.

In the context of CalPERS, community property is your contributions and the service credit you accrued during your marriage or partnership. Usually, your soon-to-be-ex-spouse's marital property interest could be up to one-half of your pension benefit.

Put simply, CalPERS is a defined benefit plan. During California divorce proceedings, defined benefit plans are divided between spouses under California's community property laws.

Unless there is a mutual agreement saying otherwise, such as a prenuptial agreement, there will be an equal 50/50 split of all the marital assets, including the CalPERS retirement pension plan, as it falls under the umbrella of assets.  

To start the process of dividing a CalPERS pension retirement plan, the spouse who wants to enforce judgment has to “join” the program in the California divorce process by filing a Qualified Domestic Relations Order (QDRO) with the family law court.

Qualified experts should draft the QDR after judgment has been entered. Usually, your divorce lawyer will use selected professionals to prepare the QDRQ.

To complete the division of a CALPERS pension retirement plan, the judgment must include specific instructions to the CalPERS administrator on the retirement plan will be divided. Our California family law lawyers will take a closer look at this below.

What is a “Joinder” in a Divorce?

As noted above, a spouse has to formally join CalPERS in the divorce as an interested, third-party claimant, which they require in all California divorce cases.

What is a “Joinder” in a Divorce?
A Qualified Domestic Relations Order (QDRO).

This means you must prepare and file joinder documentation with the court in the family law case, which will place a hold on the retirement account until the court resolves the issue.

CalPERS has to be served and provided with legal notice of joining the retirement plan, and they will then have 30 days to respond. Filing the joinder lets CalPERS know that a spouse is claiming a marital property interest in the retirement account and a claim has been made on the pension.

This action must occur before the filing of the QDRO. After the QDRO has been drafted, you should send it to CalPERS for review and approval.

Once it has been approved, then it can be filed and sent to the family court. After court approval, the QDRO is sent to CALPERS for the final administration of the plan. See the information sheet on the retirement plan joinder (FL-318-info). 

What Are the Ways to Divide a CALPERS Pension Retirement?

After CALPERS has received a certified copy of the QDRO, they will start the process of dividing the benefits. There are a couple of different ways they can divide the pension:

  • The non-member spouse can request monthly payments of the community property interest in the pension after they reach retirement age;
  • Account rollover is when the receiving spouse requests that the account be separated before their spouse's retirement. Then, the balance will be one-half of the total sum accrued during the marriage up to the date of separation, and the funds will roll over into their account.

Readers should note that a non-member spouse is not entitled to receive health benefits after the divorce has been finalized.

Pension plans fall under defined benefit plans, like CalPERS and defined contribution pension plans. Under defined benefit plans, the value does not solely depend on the contributions made; instead, it is based on a combination of factors, including the number of years of service at retirement and the highest income level achieved.

Can You Negotiate Your Pension with Other Assets?

Yes. In most cases, you can negotiate with your spouse over their community property interest in your CalPERS retirement pension.

The most common form of negotiation is working out an acceptable exchange of other assets that are of similar value to the amount they would receive from the pension in divorce, such as the marital home, other property, vehicles, boats, jewelry, etc.

Can You Negotiate Your Pension with Other Assets?
You have options for dividing a retirement account.

You would be wise to seek the legal guidance of a family law lawyer if you are facing a claim against your CalPERS pension. You need to understand all your legal options.

Unlike other property types, pension plans may not simply be split in half. Often, they don't start paying out until retirement; thus, the money and benefits can't merely be split up equally and given to each spouse during the divorce process. 

It could also cause a significant tax disadvantage to immediately remove money from a pension plan to divide during a divorce.  Family courts use a qualified domestic relations order (QDRO) to explain how the plan should be divided between spouses.

If you are facing a claim against your CalPERS and are seeking to protect your pension and discuss legal options, you need to consult with a lawyer. The money you have invested in CalPERS is significant.  You need to understand all the options before making a decision.

When negotiating pension benefits with your spouse, you must speak with an experienced family law attorney in California. We can review your rights and create a legal strategy that will serve your best interest.

If you are dividing a CALPERS retirement plan in a California divorce, we can help you. Furman & Zavatsky are located in Los Angeles County, California. Contact us by phone or use the contact form to speak with our experienced staff.

About the Author

Mariya Furman

Attorney Mariya Furman is licensed to practice before all of the Courts of the State of California, the United States Court of Appeals for the Ninth Circuit, and the United States District Court for the Central District of California. After receiving a Bachelor of Arts degree from Case Illinois I...

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