John is soon retiring from his job of thirty years and divorcing his wife, Joy, of forty years. He is looking forward to traveling, fishing, and peace and quiet. He knows that by law he will have to part with some of his treasured possessions to have this "Joy-free" life, but he has a pretty good pension coming that will allow him to live comfortably without sharing it with Joy. Is John right?

Question

What will be an ideal response?

Answer 1

Under the federal Employment Retirement Income Security Act, a spouse must be named as a beneficiary on the other spouse's pension. When the parties divorce, each spouse will have an interest in the other's holdings if the pension increased during the marriage through the spouse's employment. If John had worked for an employer for several years prior to marriage and became vested in a pension, then left that employer, and made no more contribution to that pension after his marriage, that pension would remain his separate property.
However, John contributed or made payments to his pension throughout the entire marriage, adding to its growth, which means that Joy is entitled to one-half the amount by which the account has grown since the date of the marriage until the date of the end of the marriage. If there are other assets, John could try to strike a deal with Joy to trade his pension for another asset of the marriage.