![]() ![]() Non-vested benefits are not considered marital property.ĬALIFORNIA In re Brown, 544 P. Non-vested benefits are considered marital property.ĪLASKA Laing v. If you know of a case that relates to this topic, and do not find it listed here, please e-mail us the citation so that we can include it in this section.Į-mail: ALABAMA Jackson, 656 So. If nothing is listed under a particular state it is because we have not found any pertinent cases relative to this topic. The following is a summary of case laws we have come across in our research of this topic. However, most courts have condemned this notion of postponing a decision about pension distribution. #Qdro in tennessee appily to government workers how toSome courts have found that a possible solution to the problem of distributing non-vested benefits is to wait until such benefits vest to make a decision about how to divide the property. It should be noted that delaying distribution of pension benefits is not the same thing as delaying a decision about each spouse’s share of a retirement plan. Such value should reflect a calculation based upon the contingency of the benefit. ![]() If the employee is willing to assume the risk that the benefits will never vest, it is possible to determine a value for immediate offset. If another asset is awarded to the spouse in lieu of the non-vested benefits, and the benefits never reach vested status, the employee is short changed. ![]() However, inherent in this approach is the uncertainty of the vesting status of the benefits. When using the immediate offset method of distribution it is necessary to establish a value for the non-vested benefits and award another asset in lieu of the non-vested benefits. Using the deferred distribution method eliminates any uncertainty about the vesting status and/or maturity of the benefits which would play a role in determining value for an immediate offset. At the time the pension becomes payable the appropriate portion of the benefits are distributed to each party. The most appropriate method of distributing a non-vested pension between divorcing parties is using the deferred distribution method. The difficulty of determining the exact value of the plan can be avoided by deferring payment of the other spouse’s share until the time pension benefits begin.ĭistribution: Non-vested pension rights which accrue during the marriage constitute marital property and may be divided using either the immediate offset method or the deferred distribution method. the contributions of both parties (primarily and secondary) to the pension.the time left before the benefits become vested.The following facts should be examined in determining value: Valuation: Determining the value of the marital portion of a non-vested pension can be difficult. A non-vested pension should not be considered entirely marital property, but such portion of the non-vested benefits which are attributable to service performed during the marriage should be included in the marital estate. Therefore, part of the value of the vested pension after 5 years must have been attributable to the first 4 years and 364 days of employment.Ĭlassification: There seems to be a general consensus that non-vested pension rights, to the extent that such rights accrued during the period of marriage, are considered marital property. For example, an employee’s benefit may vest after completion of 5 years of service, however, the employee could not achieve vested status without being employed for the 4 years and 364 days prior. Although vesting occurs on one day, it is not logical to assume that the pension benefit for all years of employment up to that day was entirely earned on that one day. General Discussion: Non-vested pensions, though not entirely earned, represent a form of deferred compensation for service performed over the course of a number of years. Vesting occurs when the employee completes the number of years of service required to receive benefits under the plan at some point in the future. Most pension plans require members to achieve a set number of years of creditable employment before being entitled to pension benefits under the terms of the plan (i.e. Non-Vested Pensions and Divorce Non-Vested Pensions and Divorce Definition: A non-vested pension plan is one in which the employee has not completed the required years of creditable service in order to earn the right to receive benefits under the terms of the plan. ![]()
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