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How does divorce impact a pension for public workers?

Property division is an important part of a California divorce. Issues related to property can lead to disputes throughout the process. While the most prominent disagreements are often linked to high-value items like a home, a business or valuable collectibles, retirement accounts can fall into this category as well. For those who worked in a state job, it is important to understand how their pension will be affected in a divorce.

The California Public Employees' Retirement System oversees pensions and other benefits these workers receive. For these employees, getting a divorce might yield surprising results in how their pension is split. In one case, a former fire department employee was married 18 months before he retired. After a 12-year marriage, the couple divorced. As the case moved forward, he found that his former wife could receive less than 1% of his pension. However, there were other issues he was unaware of. She was required to remain the beneficiary of the plan. Should he die first, she will get a significant amount of his pension.

According to the California Public Employees' Retirement Law, the beneficiary cannot be changed once they have retired. Divorcing is irrelevant. Because more people are getting divorced at an older age, this can be problematic. If the divorce was finalized prior to retiring, this man's case and others like it would have allowed him to make the change. The duration of the marriage is also critical in these cases. This man's marriage had lasted a short time prior to his retirement, so the amount his wife received was small. Longer marriages will leave a larger portion of the pension to the spouse.

Although these circumstances may seem unique to those who are or were public employees and use CalPERS, there are many situations where retirement accounts can result in confusion as to what must be done to make changes if there is a divorce. When getting a divorce, it is imperative to have legal advice from the beginning. A law firm experienced in property division and other issues might be able to explain various rules and help avoid pitfalls.

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John T. Chamberlin, Attorney at Law
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