How are pensions divided in a divorce?

Divorce is an emotional event, and the couple tends to get emotional about how money and property is divided during a divorce. That’s why it’s beneficial if, whenever possible, a formula can be used to determine exactly who gets what.

Such is the case with pensions. New York is a “marital property” state which means that any property gathered during the marriage is to be split between the couple during a divorce. Even though one person worked the job and the pension is in that person’s name, both spouses can make a claim to it.

The Majauskas Formula

Under New York law, your ex-spouse is entitled to half of the pension you earned while you were married. How that figure is determined was established in the case of Majauskas v. Majauskas where what has become The Majauskas Formula was established.

The formula sounds complicated but it’s quite simple. You take the number of years of service credit accrued during the marriage and divide that by half, then take that number and divide it by the number of years of service credit at retirement.

For example, let’s say you retired at a job after 50 years and were married for 10 of those years. Your ex-spouse would be eligible to receive 10 percent of your pension – half of 10 is 5, which is 10 percent of the 50 years of total benefits.

Other factors

But wait, you say – we were married early in my career and since we were divorced, I was promoted, received raises and cost-of-living adjustments. Is my ex-spouse entitled to benefit from those as well?

That’s a good question. The Majauskas Formula is not a requirement and therefore can be adjusted by either a judge or by an agreement between the ex-spouses.

The couple may agree to a flat dollar amount at the time of the divorce. This way, the ex-spouse doesn’t benefit (or suffer) from any changes in the pension.

The couple can also lock in the pension benefits at a specific date. Although retirement may be years or decades away, the pension provider can calculate a hypothetical retirement benefit using the date of divorce.

Whatever choice you make regarding your pension during a divorce, it is in your best interest to have a qualified, experienced attorney help you create the best scenario for you and lock it in to the final divorce proceedings.