26 Jan How soon will I get my ex-husband’s pension?

Q. In a divorce, I was awarded my ex-husband’s entire pension as follows: $55,000 to be released immediately and the other $55,000 to remain frozen until further notice of the court. I just hired an attorney just to secure the first $55,000 using a QDRO. I’m 62 years old and my ex is 50 years old. How will this work and when can I get the second payment?
— Unsure

A. When it comes to splitting a pension in a divorce, there are a lot of variables.

Your attorney should be able to answer all these questions based on the specifics of your divorce agreement and the QDRO, which is short for a Qualified Domestic Relations Order.

Here’s what you should consider.

There are two ways to divide a pension: a shared interest approach and a separate interest approach.

A separate interest is one in which the interests of the plan participant — the spouse who participates in the plan — and alternate payee, who is the non-participating spouse, are separated, said Jeralyn Lawrence, a family law attorney with Lawrence Law in Watchung.

In this case, the alternate payee’s rights to a portion of the pension are established and independent from that of the participant.

In a shared interest approach, the interest of the alternative payee is tethered to the interest of the participant, she said.

In this case, when the participant retires and his or her pension goes into pay status, the pension plan will pay the alternate payee a portion of each payment for as long as the participant is living and eligible to receive the pension, she said.

Therefore, the alternate payee must wait until the participant elects to retire and commences pension payment in order for the alternate payee to receive his or her share of the pension following a divorce, Larwrence said.

It’s important to note that civil service pensions including federal, state and local government plans and military pensions, do not allow for a “separate interest” option and will only permit a “shared interest,” Lawrence said.

Generally, she said, a separate interest option is only available for pensions provided by large corporations or unions.

“Without knowing what form of pension in which your ex-husband participated during the marriage, it would be difficult to determine whether a separate interest approach applies to you and your acquired interest in the pension,” she said.

That’s once again why you should speak to your attorney and review the summary plan description for the pension to see your options.

As for timing, Lawrence said the timeliness by which you receive your share of the pension will depend on the terms of the plan, which is probably explained in the summary plan description.

“The Plan may be unable to facilitate any payments to you without a Qualified Domestic Relations Order QDRO, which you indicated you are working toward completing,” she said. “In the event this is now complete, the plan will dictate the timeframe in which you will receive your share. This may either be outlined in the QDRO or the summary plan description, or may be ascertained through direct contact with the plan.”

Each pension is going to be different and have a unique set of guidelines under which it operates, so make sure to understand the specifics that apply to you.

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This story was originally published on Jan. 26, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.