New Jersey Divorce Lawyers Blog
As with all family law questions, there is no “one size fits all” answer regarding pension distribution. How a former couple’s marital assets are split can depend on a variety of factors. Typically, retirement accounts are one of the largest assets distributed between spouses following a divorce. Pensions, 401ks, 403Bs, traditional and Roth IRAs, deferred income, and any other monies that are allocated for retirement are subject to the provisions included in New Jersey’s equitable distribution statute.
In general, New Jersey’s equitable distribution statute requires that each party to a divorce receive a portion of the marital assets regardless of how the title to the asset is registered (i.e.- in one spouse’s name alone or in joint names), including a pension or other retirement account. Only the portion of a retirement benefit that was accrued during the coveture period (the date of marriage thru to the date of the complaint for divorce) is subject to equitable distribution. The portion of a retirement benefit/plan that predates the marriage or was contributed after the complaint for divorce is filed, are typically exempt from distribution. Such an account is typically divided using a Qualified Domestic Relations Order (“QDRO”). A QDRO is a court order that directs the administrator of a pension or other retirement asset to distribute a portion of the account to another party following the dissolution of a marriage. Although a QDRO must be signed by a judge, it should be negotiated by the divorcing couple through their respective attorneys or other means. Prior to entering into a QDRO, however, a number of factors must be considered.