{4 minutes to read} The most typical way a pension is divided would be through a Qualified Domestic Relations Order (QDRO). A QDRO provides that, at retirement, the marital portion of the pension will be divided in the way that you have agreed upon in your Separation Agreement, usually 50%. The marital portion is the part that accumulated during the marriage.

But you’re in mediation, so you don’t have to do what is typically done. Especially if the QDRO doesn’t address the strong emotions that I described which tend to arise in pension discussions.

Present Valuation

One thing that you can do to provide yourself with other options for settlement is to hire an actuarial company to compute a value for the pension, as of the date you agree to use, for valuing your assets. 

Offsets 

Then, when you have that value, you can decide if you want to offset it against other assets, such as the equity in your home; or other retirement assets, bank, or investment accounts. The owner of the pension (titled spouse) will be entitled to all of the pension and the other spouse will have all of the agreed-upon assets. (You may need to impact the assets being transferred for income taxes so that the values you’re exchanging will be equal after income taxes are paid.)

Partial Offset 

Maybe there are not enough other assets to equal the value of the pension, or maybe the non-titled spouse wants some of the pension, even if it’s a smaller amount. You can do a partial offset by using a percentage of the present value against assets to the non-titled spouse who would then get a reduced percentage in the pension. It takes some high-level math to figure this out, so you might want to use a financial professional. 

Knowing Waiver 

After a discussion about both of your needs and interests in regard to the pension — and you have reached an understanding of why it is important to each of you — you should also discuss what your relative financial positions are likely to be at the time you expect to retire. 

What if the titled spouse will be solely relying on the pension in retirement and the other spouse has separate property that will enable them to retire comfortably? Or maybe the titled spouse is much older and will be retiring soon, and the non-titled spouse feels that they will have much more time to build up their own retirement assets. 

In those situations, the non-titled spouse may be willing to waive the pension in exchange for more support or another asset. This may not mathematically equal the value of the pension, and it should be thoroughly discussed as to why the waiver is occurring. For a knowing waiver, It should also be clear that the non-titled spouse understands the value of what they are waiving, their entitlement to the asset under the law, and has reality tested the effect of the waiver as to whether or not they can afford it.

As long as you are not looking at mediation as a zero-sum game and are both willing to engage in the kinds of discussions that can lead to understanding the other, you have options when you are discussing how a pension can be divided. And whether the result is having the marital portion of the pension equally divided by the QDRO, a full or partial set-off, or a waiver in whole or in part, the decision would be one knowingly made by you, and a determination which you can accept. 

Family Court Mediation is a topic I’ve never spoken about, but I have been working with clients in Family Court recently. Family Court is a very busy court and takes many months and years to get through the process. Mediation is a much more streamlined process. First, mediate, but if you are already involved in Family Court ask about mediation and see if you can get into the Family Court Presumptive ADR Program.

Couples with opposite personality traits may thrive as one’s style is countered by the opposite style. When they divorce, the characteristics that attracted them to one another can now seem annoying and negative. Discussing between yourselves can lead to fights, but mediation can allow you to frame your differences in more positive ways.

If one party takes their separate property and puts it toward a jointly owned home, they may be entitled, by NY law, to a separate property credit when divorcing. This can be difficult because people don't lead their married lives in anticipation of getting a divorce, so the separate property credit can have both practical and emotional consequences.

When you involve a consulting attorney, you want one who is a proponent of mediation. One who will help you acquire the skills and tools to advocate for yourself. The discussion in mediation can then be more mutual and result in terms that are more reasonable. In mediation, parties are empowered by making their own decisions and being an advocate for themselves.

You're going through a separation and your communication with your co-parent is awful. You fight about everything. You're wondering: ''How are we ever going to be able to agree upon major decisions about our children, and what are we going to do if we can't make any decisions?'' Your answer to that might be: ''Well, maybe I should just say I'll be the sole decision-maker and I'll ask for sole custody.'' While that sounds rational to you, it's not going to have the same effect on your co-parent. 

If your spouse has some financial or legal knowledge that you don't, you may feel at a disadvantage in mediation. But you don’t have to give up all of the benefits of mediation just because of your spouse’s profession. The answer is to seek professionals who can help you to become empowered and feel comfortable in mediation, so you can properly advocate for yourself, and make the best decisions you can.

There are many special occasions to share in your life and the lives of your children. When divorcing, however, those occasions can become mini-battlegrounds, causing discomfort to visitors and your children. If you have children, you will be co-parenting for life. In mediation, we can build in ways to handle conflicts as the lives of you and your children move forward.

Strong emotions can arise when you are talking about distributing a pension. By explaining why each of you feels entitled to the pension, you can open the door to a productive discussion and start talking about options in a way that recognizes what you both need and what your expectations are. Through that discussion, you may be able to reach a settlement that's going to meet those needs and expectations.

To the extent that your pension was accumulated during the marriage, it would be treated like any other assets subject to distribution. But there may need to be more to the discussion than just what the law provides.