When a couple divorces, they probably focus first on dividing the property that’s easy to see–the home, furniture, cars, etc. The property they can’t see–their intangible property–is also affected by divorce.

For many families, a pension is the largest asset, after the family home. Even if the pension is earned solely by the efforts of one spouse, the portion of it that was earned during the marriage is still marital property subject to division by the court.

Many courts prefer to give full rights to a pension to the party who earned it as long as the other party will have a sufficient amount of income and property from other sources.

If, however, the pension is the primary source of income that a spouse would have and there are no other significant sources of income, the court is likely to divide rights to the pension. The court can divide the pension between the spouses by percentages (i.e., spouse A will receive 60 percent, spouse B 40 percent) or by a fixed cash amount to one spouse with the remainder to the other spouse (i.e., spouse A will get $600 per month, spouse B $400).

Congress has passed a law facilitating division of pensions. The law allows entry of orders by a court called Qualified Domestic Relations Orders (QDROs). These orders, when properly entered by a court, require the administrator of a pension plan to send pension checks not only to the worker, but also to the worker’s former spouse. The court cannot order a pension check to be written before the worker is entitled to the pension, nor can the court change the total amount of the pension that is due. But the court can direct that when a worker is eligible for a pension (even if he or she has not yet retired and is not drawing a pension), checks must be sent to the worker’s former spouse.

For example, if a couple is divorcing after a worker has retired, the court may order that pension payments be divided fifty-fifty (or by some other percentage). If the couple divorces while the worker is still employed and accumulating retirement benefits, the court may ascertain the value of the pension as of the date of the divorce and order division of that sum. When the worker later becomes eligible for payment of retirement benefits, the spouse could receive pension payments for a portion of the pension earned during the marriage. The worker would receive the remainder of the pension, including all of the pension that accumulated after the divorce.

QDROs can be applied to pensions of most private employers. If a spouse has a military pension or certain types of government pensions, different types of orders with different types of forms may be required, but in most cases, the result can be the same: with a properly entered order by a court, the pension can be divided between the spouses.

Sidebar: Social Security Benefits

Divorced spouses may also be eligible to collect Social Security retirement benefits based on their ex-spouse’s work record. As long as the divorced spouse:

  • is sixty-two or older
  • is unmarried
  • was married to the worker for at least ten years and
  • is not entitled to benefits on own or other account, that exceed one-half the wage earner’s primary benefit amount

he or she is generally eligible to collect benefits. The wage-earning spouse doesn’t have to be retired and actually drawing benefits; he or she just has to eligible for retirement benefits.

The impact of divorce on Social Security retirement benefits is very different from its impact on pension benefits. A worker with a pension is eligible for a certain amount of money in benefits. If a court orders these benefits split between the parties, the worker’s share will go down.

With Social Security retirement benefits, the eligibility of a divorced spouse has no effect on the amount the worker is entitled to. He or she will collect that amount whether he has no eligible spouse or ex-spouse or whether he has four ex-spouses all eligible to collect based on his work record.

That’s one reason establishing eligibility for a divorced spouse is normally not difficult. It doesn’t require a court appearance or even notification to the worker. It simply requires presenting the appropriate documentation to the Social Security Administration. Documentation would normally include proof of

  • identity
  • each party’s age
  • marriage and
  • divorce (the divorce must be final; the legal action cannot be a separation or an annulment)

Generally, original documents are best, but certified copies will be acceptable.

A divorced spouse may also be eligible for benefits on the account of a deceased wage earner if the wage earner was eligible for benefits. Requirements are similar to those outlined above, except that the surviving divorced spouse must be at least sixty (or at least fifty and disabled or be caring for a child who is also eligible to receive benefits on the deceased wage earner’s account) and the surviving divorced spouse can remarry after age sixty (age fifty if disabled). The amount of the benefit is approximately equal to the wage earner’s primary benefit amount. As with retirement benefits, more than one person can collect. Applicants will need the documents outlined above, along with proof of the wage-earner’s death and, if applicable, of disability.