Pension Issues: Counsel First, Negotiate, then go on the Record!

I have recently been working on a case where we have agreed to draft a Qualified Domestic Relations Order for a client pursuant to her divorce.

Both parties are represented by attorneys, but the extent of the negotiation regarding the pension and the terms on the record were, "Wife is entitled to half." Unfortunately, this is extremely typical and very problematic. There are important additional aspects of the pension plan that were not addressed and could result in the former spouse getting nothing at all, and leaving them out may be considered malpractice.

In this case, the pension is a defined benefit plan, which means the employee will receive a fixed amount of money each month for the rest of his life based on his service and earnings when he reaches an eligible retirement age.

"Half" is insufficient because the employee has not yet retired, and there was no negotiation regarding "half of what?" The employee expects the Wife to get half as of court date, and the former spouse expects half of the whole thing. These parties will probably end up back in the courtroom, when they expect that the divorce has already been completed.

Additionally, when awarding an interest in the pension to the spouse pursuant to the divorce, ATTORNEYS MUST CONSIDER WHAT WILL HAPPEN TO THEIR CLIENT'S PORTION OF THE PENSION IF THE EMPLOYEE DIES. Death can occur before the employee begins collecting retirement pay, or after he or she begins collecting, and most plans usually treat the event differently. If the attorney puts no provision in the Orders regarding the former spouse's interest if the death occurs, he or she could be left with nothing!

If you getting divorced and you or your spouse have retirement plans, your attorney should be familiar with the type of plan and its provisions, as well as the ways in which it can be divided. If the attorney does not know about the plan, or does not even know the questions he or she needs to ask, then you or your attorney should call our office for a consultation.

Our attorneys can provide information, suggestions for discovery and language for court orders, or be hired to offer expert testimony in the event of contested issues.

We can be reached at (401)841-5700 or visit our website at www.CounselFirst.com for more information about our office.