What Happens to Pensions During a Divorce? - National Educational Services
 What Happens to Pensions During a Divorce?

What Happens to Pensions During a Divorce?

Divorce is never a great situation to be in but if you are going through a divorce, you probably have realized it can happen in different ways: fast, ugly, devastating, or any other way you could think of. As an educator with a retirement pension plan, there are numerous ways that your pension plan could be affected. 

Advisors at National Educational Services are here to help make sure you understand anything and everything that can happen to your pension during a divorce. 

No Change to Your Pension

As an educator, it is likely that your spouse earns more income than you do, this will result in your pension being left as is. Additionally, the judge may make the decision to split assets as opposed to splitting the pension plan. This situation tends to occur when the spouse of an educator has extensive assets and their own additional pension plan. 

Unfortunately, this situation does not happen very often but if it does it will make the financial aspect of  divorce much easier. 

Pension is Split 

Most likely if you are an educator that is going through a divorce, your pension plan for retirement will be split up during retirement. When going through a divorce all your retirement assets, which includes your pension will be under a Qualified Domestic Relations Order. When a QDRO is filed, the court will then determine…

  • When your retirement assets are split
  • How your retirement assets are split 
  • How much of your retirement assets will be given to each party 

Each state has specific rules regarding the process of Qualified Domestic Relations Orders so make sure you look up the laws that are specific to your home state.

Benefits are Accelerated 

Additionally, in many cases the Qualified Domestic Relations Order will state that the spouse must delay the collection of their benefits until the educator has begun to receive retirement benefits. Although it is not very common, in some cases the spouse will be able to receive their benefits at an accelerated rate and be paid out before the teacher has retired. 

Refund & Split 

If the educator happens to not yet be vested in their retirement pension, then all of the current contributions are refunded and then split in accordance with the Qualified Domestic Relations Order.

Additionally, the QDRS will also determine when these contributions are refunded and split amongst the two parties. 

Want to Find Out How Long Your Pension Will Last You While In Retirement? 

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