In New York, the law is that all forms of retirement plans, whether called pensions, 401ks, IRAs, profit sharing plans, or any other name, which are marital property, are subject tp being equitably distributed. All benefits which are part of a spouse’s retirement plans, to the extent that benefits accrued during the marriage and prior to the commencement date of the divorce action, are subject to equitable distribution.
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The courts use a formula (referred to as the “Majauskas” formula), to calculate the split. Under the Majauskas formula, the actual accrued benefit is multiplied by a fraction. The numerator is the number of months of the marriage, and the denominator is the number of months of employment with pension credit upon retirement. The accrued benefit is the benefit received by the spouse upon his/her retirement. Finally the result is multiplied by the percentage to go to the other spouse. In a long-term marriage this is usually 50%. For example: If the Husband’s retirement benefit is $1,000 per month and if the number of months of pension creditable service which occurred during the marriage is 168, and if the total number of months of pension creditable service is 240, then the amount to be paid to the Wife is determined by dividing 168 by 240, which equals 70%, and that figure is multiplied by 50%, resulting in a percentage of 35% to be paid to the Wife. The $1,000 total retirement benefit is then by multiplied by 35%, resulting in the Wife being entitled to $350 per month. The division of most retirement plans require that a judge sign a specialized court order called a “Qualified Domestic Relations Order.” This order must comply with a number of very particular rules and must be very specific in order to work.
Call Law Offices of Mindin & Mindin, P.C. today at 888-501-3292 if you have concerns about how a divorce may affect your retirement. We offer free consultations to discuss your unique set of facts.