Tag Archives: Divorce

Four Facts about Divorce and Your Pension

Courts consider pensions marital property. So, if you file for divorce, a judge may award your ex-spouse part of your pension or other NYSLRS benefits. The process for dividing retirement assets after a divorce can be complex. Here are four things you need to know:

1. NYSLRS Requires a DRO

To divide your NYSLRS benefits, we need a domestic relations order (DRO). This court order, issued after a final judgment of divorce, gives us specific instructions on how your benefits should be distributed. NYSLRS provides on online fillable DRO that complies with the plan’s requirements for implementation. You are not required to use the online form; however, the System will give priority review to these DROs since the language is pre-approved.

2. A Judge has to Approve Your DRO

Before we can implement a DRO, a trial court judge must review and sign it, and you need to file it with the appropriate County Clerk’s Office. That can be a lengthy process; our Matrimonial Bureau can check your DRO for compliance with the law before you submit the draft order to the court. This way, if the DRO does not meet the requirements, you will have a chance to make revisions.

Once a judge does sign off, we’ll need a certified copy of the DRO and your judgment of divorce. We start payments to your ex-spouse once we’ve calculated and finalized your retirement benefit. If we receive the DRO and judgment before we finalize your retirement benefit, we’ll make retroactive payments back to your date of retirement.

3. Some Beneficiary Designations are Revoked

Reviewing your beneficiary designations periodically is always important, but after a divorce, it’s essential to make sure your benefits will be distributed according to your wishes. As of July 7, 2008, beneficiary designations for certain benefits are revoked when a divorce, annulment or judicial separation becomes final. Please read our Guide to Domestic Relations Orders and review our DRO FAQs before you finalize your divorce.

4. Contact an Attorney with DRO Experience

This last one is not a fact, but it’s a good idea. A lawyer, who’s worked with DROs previously, can help ensure the DRO you submit to the court fairly represents the intentions of both parties.

How Can NYSLRS Help?

We developed an online template  that makes it easier to create a properly formatted DRO. Just enter your tier, plan and employment status, and answer the questions that follow.

To submit your proposed DRO for review, email it, along with scanned copies of your judgment of divorce, to our Matrimonial Bureau at dro@osc.state.ny.us. For DRO proposals prepared using our online worksheet, the review process is simplified and we can complete our review faster.

If you have any questions about divorce and your benefits, please contact our Hearing Administration and Matrimonial Bureau staff.

Email: dro@osc.state.ny.us

Address:
NYSLRS 110 State Street
Mail Drop 7-9
Albany, New York 12244

The Top 5 Things NYSLRS Members Need to Know About Retirement and Divorce

The most important thing you need to know is that if you divorce, your ex-spouse may be entitled to a portion of your pension or other New York State & Local Retirement System (NYSLRS) benefits. But determining how to divide retirement assets in your NYSLRS plan as a result of a divorce can be complex. Knowing these five key points can provide some clarity:

NYSLRS Requires a Domestic Relations Order (DRO)

For divorcing NYSLRS members, any division of your retirement benefits must be stated in the form of a domestic relations order (DRO) – a court order issued after a final judgment of divorce that gives us specific instructions on how your benefits should be distributed to your former spouse.

Without A DRO, NYSLRS Will Not Provide Your Ex-Spouse Any Portion of Your Pension.

The pension that you receive is a benefit held in trust by NYSLRS and you are considered the beneficiary of that trust. You cannot assign retirement benefits to another person and, because NYSLRS has no legal relationship with an ex-spouse, no payments will be made to an ex-spouse based on a separation agreement or judgment of divorce alone.

Prepare the DRO before you finish the divorce

The DRO must be signed by a trial court judge and entered with the appropriate County Clerk’s Office before it can be implemented. Our Matrimonial Bureau may review your DRO for compliance with the law before you submit the draft order to the court. This way, if the DRO does not meet the requirements, you will have a chance to make revisions.

We require a certified copy of the signed DRO and a copy of your judgment of divorce prior to implementing the terms of the DRO. Payments to your ex-spouse will start when your retirement benefit is calculated and finalized, and will be retroactive to your date of retirement if we receive the DRO and judgment of divorce before your retirement benefit is finalized.

Change your beneficiary designations on your retirement benefits after your divorce.

It is especially important to review your beneficiary designations to ensure your benefits will be distributed according to your wishes. Effective July 7, 2008, beneficiary designations for certain benefits are revoked when a divorce, annulment or judicial separation becomes final. Please read our Guide to Domestic Relations Orders and review our DRO FAQs before you finalize your divorce.

Contact an attorney with DRO experience

He or she can help you ensure the DRO you submit to the court fairly represents the intentions of the parties.

How Can NYSLRS Help?

We recently developed an online worksheet, which helps you create your own DRO easily in the proper format. Just enter your tier, plan, employment status and answer the questions that follow. Then, submit a copy of your proposed DRO to us for review before you submit it to the court. You can email it, along with scanned copies of your judgment of divorce, to our Matrimonial Bureau at dro@osc.state.ny.us. DRO proposals that are prepared using this form will be given priority review.

If you have any questions about divorce and your benefits, please contact our Hearing Administration & Matrimonial Bureau staff by email at dro@osc.state.ny.us, by writing to 110 State Street – Mail Drop 7-9, Albany, New York 12244, or by fax at 518-474-7794.

Retirement Planning – Divorce and Your Pension

One aspect of retirement planning some members may not consider is how a divorce may affect their retirement benefit. In New York, retirement benefits are considered marital property and can be divided between you and your ex-spouse. While some divorced couples may choose not to divide retirement benefits, it’s important to think about what you will need to do if your pension will be affected by divorce.

Preparing for Retirement: Part Five — Divorce and Your Pension

The Preparing for Retirement 7-part video series discusses the main aspects of retirement planning to help NYSLRS members nearing retirement make good, informed decisions for the future. In Part Five – Divorce and Your Pension, you’ll hear about how if you are divorced, your ex-spouse may be entitled to part of your pension. NYSLRS needs a valid domestic relations order (DRO) on file so we can have the instructions on how your pension benefits should be divided. You’ll also learn what resources NYSLRS has available to help you construct a DRO, if needed.

Important Links for Retirement Planning

Where to Find More Retirement Planning Information

If you are close to retirement and have more questions, consider scheduling an appointment to meet with an information representative at one of NYSLRS’ consultation sites in New York State. Don’t forget to check back for the rest of the Preparing for Retirement video series, which includes retirement planning topics like:

How Divorce Affects Your NYSLRS Benefit

If you get divorced you should be aware that, in a decision called Majauskas v. Majauskas, the New York State Court of Appeals determined that retirement benefits earned during a marriage are marital property, which means that, in the event of a divorce, your ex-spouse may be entitled to a share of your benefit.

Here are some ways the division of your retirement benefit can take place:

  • Your ex-spouse could receive a portion of your pension
  • Your ex-spouse could be named a beneficiary of any pre-retirement death benefit payable
  • You may need to choose a retirement option that on your death, provides a monthly benefit to your ex-spouse
  • Your ex-spouse could receive a portion of your Cost-of-Living Adjustment

However, the division of your retirement benefit needs to be in the form of a domestic relations order (DRO ) — a court order that gives us specific instructions on how your benefits should be distributed. Once we approve your DRO, it must be signed by a trial court judge and entered with the appropriate court clerk. We require a certified copy of the signed DRO and a copy of your judgment of divorce prior to implementing the terms of the DRO. Payments will start when your retirement benefit is calculated and finalized, and will be retroactive to your date of retirement if we receive the DRO and judgment of divorce before your retirement benefit is finalized.

Remember — a DRO is not to be confused with a judgment of divorce or separation agreement. It is not the same. The DRO is a separate court document which, once accepted by NYSLRS, is legally binding on us. Please read our Guide to Domestic Relations Orders before you finalize your divorce.

Significantly, the DRO won’t distribute any portion of your pension until you actually retire, die or terminate your NYSLRS membership.

Drafting Your NYSLRS DRO

The parties may draft their own DRO or create one using our DRO template. Submissions received using the NYSLRS’ template are given priority review. Please fill out the template completely. Once you have created a proposed DRO, please print a copy and submit it, along with a copy of your judgment of divorce, to our NYSLRS Matrimonial Bureau for review.

Our Matrimonial Bureau will provide an interpretation of your proposed DRO before you submit the draft DRO to the court. If the DRO cannot be implemented by NYSLRS, you will have a chance to make revisions.

Still have some questions? Our Divorce and Your Benefits FAQs may be helpful. Otherwise, you can always email us at dro@osc.state.ny.us.