If you’re expecting a pension at retirement, you may be less excited about the pension when you and your spouse are heading for divorce. While pensions are not as common as they were in decades past, if you’ve been promised one from your Colorado employer, you know the financial stability that a pension can provide once you are no longer working.
When you and your spouse are preparing to end your marriage, you may be wondering whether your pension counts as an asset that you may be required to split with your ex. Here are some important rules to know.
Basic pension rules in divorce
When a pension is earned by one spouse, the pension is classified as a joint asset. The same is true for retirement accounts like IRAs and 401(k)s. Colorado laws will govern how much of your retirement account your spouse will receive after the divorce. In most cases, whatever each spouse earns before the marriage will still be considered individual property after the divorce, and what is earned during the marriage is a joint asset.
If you have a pension, you’ve probably heard about the Employee Retirement Security Act of 1974, or ERISA. These are the rules that protect your pension. However, the Retirement Equity Act was introduced in 1984, and this act protects pension-related spousal benefits. To gain part of your pension, your spouse will have to request it at the time of the divorce and not when you retire. This request is completed through a court document called a qualified domestic relations order.
Whether your spouse is entitled to your pension if the two of you divorce can be a tricky question. To get clarity, you may want to consult with a qualified family law attorney. A legal professional may help you determine which assets should be divided in a divorce.