In dividing pensions I think the first place to look is whether or not the recipient spouse is in pay status or not. If the recipient spouse is in pay status, in other words they’re already receiving their monthly or quarterly, or periodical benefit, however it’s paid. Then it’s just a function of figuring out whether it’s entirely community property in nature or whether there is some combination of separate and community property interest.
If the working spouse has not yet retired then there’s typically the engagement of someone like an actuary who can do an analysis based upon a number of factors, the age of the employee’s spouse, how much longer they have to work, what changes incrementally, individually across the board will take place with the benefit to which all the planned members are entitled. What survivor benefits will be chosen? In other words will the monthly benefit at some future date be maximised by an agreement of the working spouse that when they die all benefits will cease or will the benefit be reduced because a survivor benefit will be elected that some portion of the retirement entitlement will go to the other spouse?
If you’re not in pay status the biggest mistake you may make is misunderstanding the assumptions and miscalculating how those assumptions project a future entitlement of a benefit that the client is not presently receiving. If you’re in pay status you really have a finite number to work with and the only thing you really need to focus on is to make sure that you quantify the community portion and the separate property if there is a separate property element separately. I should say accurately, we do that with something called the time rule. And the time rule is just a fraction that sets up how much of the total term of retirement services community versus separate, and that’s how we come up with that percentage and that needs to be accurate.
Leslie Shaw practices family law in both California and Nevada, and has been involved in close to 1,000 family law matters largely involving litigation throughout his 40 year career. He is also a Certified Family Law Attorney, a status granted by the California Board of Legal Specialization.