By Dale Riedel, Esq. · Admitted in New York, Bar No. 5837539
Answer
The portion of a retirement account or pension that accrued during the marriage is marital property and subject to division. Contributions made before the marriage, and their growth, are generally separate property. Dividing most employer plans requires a separate court order — a QDRO — in addition to the divorce judgment.
What portion is marital
For a 401(k), 403(b) or IRA, this is largely arithmetic. The account’s value at the date of marriage, adjusted for growth, is separate. What accrued during the marriage is marital.
For a defined-benefit pension, it is a formula. New York courts commonly allocate the marital share by reference to the period of service during the marriage relative to total service — the method set out in Majauskas v. Majauskas, 61 N.Y.2d 481 (1984).
The step that gets missed
A divorce judgment says the retirement asset is divided. It does not, by itself, make the plan administrator do anything.
A Qualified Domestic Relations Order — a QDRO — is a separate court order directing the plan to divide the account or pay a share to the former spouse. Without one, the plan will not act. Your agreement can be perfectly clear and the money will not move.
Why this matters more than it sounds
This is among the most common serious failures in New York divorce practice, and it is almost always an oversight rather than a dispute.
The agreement divides the pension. Everyone assumes someone is handling the order. Nobody does. It surfaces twenty years later, at retirement, when the former spouse contacts the plan and discovers there is nothing on file — by which time the remedies are limited, expensive, and sometimes unavailable.
If you are already divorced and your agreement divided a retirement asset, check that the QDRO was entered and accepted by the plan. It is a short inquiry. Make it today rather than at sixty-five.
Three practical points
Do it at the time of the divorce. A QDRO prepared years later is harder — records go missing, the account has changed shape, and the other party may be uncooperative or unreachable.
Each plan has its own requirements. Administrators reject orders that do not meet them, so the order has to be drafted to the plan, not from a template.
Government and military retirement systems have separate rules and are not covered by the same instrument.
Survivor benefits
Frequently overlooked and expensive to overlook. Whether a former spouse keeps a survivor benefit under a pension is a separate question from how the pension is divided, and it has to be addressed expressly. If it is not, the benefit can be lost.
The short version
The marital portion is divisible. Dividing it takes a separate order most people forget. If you are already divorced, confirm yours exists.
Read more: Retirement Division & QDROs · Equitable Distribution · Post-Judgment Modification