New York Division of Retirement Plans
Retirement plans of all types and nature including but not limited to 401 k plans, 403 b plans, IRA’s, pension plans, profit sharing plans and all other retirement compensation plans are equitable distributed in a divorce. All benefits accrued in the aforementioned plans during the term of the marriage are considered marital property.
Majauskas Formula
There was a case called Majauskas v. Majauskas in New York State. This case set the standard for the division for all types of retirement plans. The Majauskas formula regarding the division of Retirement Plans as follows:
A fraction is created. The numerator consists of the number of months in the marriage.
The denominator is the number of months the asset accrued due to the employment of the husband or wife.
An accrued benefit would consist of the amount received by the spouse in his or her retirement plan.
The accrued benefit is multiplied by the equation of the numerator and the denominator.
Thereafter, that figure is multiplied by the percentage received by the non-titled spouse. In most long-term marriages, this amount is 50%.
Example: Lets say a husband’s retirement benefit is a $1,000 per month. The number of months the pension accrued during the course of the marriage is 100 and if the number of months of total pension credit is 200 the amount paid by the husband to wife is determined by dividing 200 by 100 which equals 50% and then that figure is multiplied by the 50% equitable distribution (pursuant in a long term marriage) resulting in a percentage to be received by the wife of 25% of the pension benefit. In the case of this example, that would be $250 a month upon the retirement of the husband. To effectuate the division of most retirement plans a actuarial analysis if very often required. Thereafter, a specialized court order called, a "Qualified Domestic Relations Order" (QDRO) needs to be submitted to the Judge on the case and thereafter signed by the Judge and served on the Administrator of the Pension or Retired Benefit Plan.
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