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How Is A Federal Employee’s Pension Split In Divorce?

Many people in the process of divorce may not realize that retirement plans can represent the largest marital asset. If one of the individuals is or was a federal employee, there is even more to consider when dividing marital assets. Here is some information about what is at stake for federal employees going through divorce and how federal employees can protect their rights when dividing property.

Retirement savings are marital property that can be subject to division in divorce. The Employee Retirement Income Security Act of 1974, or ERISA, is the law governing the division of retirements in the private sector. However, this law does not pertain to federal pensions. For employees of the federal government, the law is much more complicated when it comes to dividing a pension in divorce. That is why it is important to seek the guidance of an attorney experienced in dividing a federal pension in divorce to prevent issues in the future and also:

  • Ensure your divorce settlement or court order adequately addresses all issues related to a federal pension.
  • Protect your retirement. Divorce can obliterate your retirement funds if you are not careful. Survivor elections for subsequent spouses can be very expensive or limited if federal benefits are not awarded properly during the divorce process.
  • Determine an accurate value of all retirement funds.

When a divorcing couple is working out a settlement or an order, the true value of a pension must be determined. When the value is known, it can be divided or one-half of the marital value can be offset with other assets.

Terminology and benefit options for federal pensions are often mistaken for what a pension in the private sector would provide. For all of these reasons, it is in the best interest of all federal employees or spouses of federal employees going through the divorce process to find a lawyer who truly understands splitting a federal employee’s pension.