How to Negotiate a Pension Benefit in Divorce
A very important asset of many couples involved in a divorce is a pension plan of one or both parties. As is the case with all other assets accumulated during the course of a marriage, issues surrounding the benefits of a pension must be resolved. In some cases the parties---oftentimes through the assistance of their attorneys---are able to negotiate a settlement relating to a pension plan or benefit.
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Things You'll Need
- Written general settlement agreement
- Written pension settlement agreement
Instructions
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Determine the accrued (current) value of the pension. If the pension was in place before the marriage, determine the value of the pension plan at that juncture in time. The portion of the pension that is subject to division as part of a negotiation and settlement process is that amount represented by the increase in value of the pension during the course of the marriage.
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2
Undertake the same procedure with both pension plans if there is one for each spouse. Appropriately dividing the assets of the marriage typically precludes merely letting each party keep the full value of a pension plan.
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Discuss with your spouse (or with your attorney) the most appropriate way to make a division of the value of the asset. There are a number of options available, including entering into a specific pension agreement that provides for a payment of a proportional share of the pension to both spouses at the time the spouse who owns the pension retires. Alternatively, the spouse who owns the pension can make a cash payment to the other spouse in the amount of the calculated share of the pension.
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4
Prepare a general settlement agreement that includes the manner in which the pension benefit is to be distributed.
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Draft a special pension settlement agreement if the distribution of the benefit between spouses is to be undertaken upon the retirement of the spouse that owns the pension plan.
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Sign the agreement or agreements and file them with the clerk of the court as part of the overall resolution of your divorce case.
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