Defined benefit plans are typically divided by a coverture fraction allocating the marital portion, while defined contribution plans are divided by account balance. Implementation requires a qualified order for most plans.
Immediate offset and deferred distribution are alternative approaches.
Alternative Names:
Retirement Division|Pension Allocation
Why it Matters?
Deferred distribution shares future benefits while immediate offset trades present value against other assets, and the choice matters because present value calculations for defined benefit plans depend on discount rate and mortality assumptions that materially affect the figure. Deferred distribution avoids that dispute but leaves the parties financially connected for decades. Survivor benefit elections must be addressed under either approach.
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Frequently asked questions
What distinguishes the two approaches?
Why does the choice matter?
