Each party is usually entitled to 50% of the coverture or marital portion of the other’s retirement account, including the gains/loses. The marital portion is defined as the amount from the date of marriage through the date the Complaint for Divorce was filed plus/minus market gains/losses. Sometimes the parties agree to different adjustments, which may permit one party to retain a larger portion of the account or the entirety of his/her retirement account(s). For example, one party may retain the marital residence and in exchange the other party may retain the entirety of his/her retirement account(s). This, of course, entails tax considerations as well.

What information is necessary?

First, the parties need to determine what type of retirement accounts they each have. For example, is it a pension, a 401K, an IRA, etc.? These accounts should be listed on each party’s Case Information Statement. During discovery, each party should provide a current statement, along with a statement at the time of marriage or when the account was first opened, if available. It is also beneficial to exchange 3-5 years of statements for each account.

If the retirement account is a pension, the analysis needs to go further. For example, what type of pension is it? Is it through a union, a state pension, a federal pension, military[1], etc.? Additionally, what will the monthly benefit be upon retirement? A valuation is often needed to determine the monthly benefit, along with any other benefit that a party may receive.

What if there are Pre-Marital funds in the account?

The party alleging that there are pre-marital funds in a particular retirement account has the burden of proof to demonstrate those facts. Many people often switch jobs during their marriage and roll over funds from their 401K to an IRA. Unless this account is entirely pre-marital or you have statements around the date of marriage, it is nearly impossible to determine the pre-marital/marital portion (this is without even considering the gains/losses on the pre-marital portion). 

If the party has been employed by the same person/company for the entirety of the marriage and the company has not changed the administrator that they use for the 401K, IRA, pension, etc., the company should be able to figure out the pre-marital portion. If not, the easiest way would be to either list the retirement assets in Pre-Nuptial Agreement or to provide a statement of the account around the date of the marriage. However, this may be difficult, if not impossible to do, depending upon the circumstances. This statement does not show the gains/losses on the pre-marital portion of the account. In order to determine the gains/losses on the pre-marital portion, an expert may have to be retained to do an analysis.

What if there are loans on the accounts?

If there are loans on the retirement accounts, the parties need to determine if 1) one party is going to be entirely responsible for the loan; 2) they are going to share a percentage of the loan; or 3) they are going to be equally responsible for the loan. This should be specifically stated in the settlement agreement to avoid any confusion/motion practice later on. 

Are there other alternatives for distribution, rather than equally dividing each account?

Parties often try to equalize all of the accounts, rather than equally divide each account. If the accounts can be equalized, this is usually less costly and easier for the parties to do. However, not all accounts can be equalized. For example, a 401K usually can not be equalized with an IRA. These are different types of accounts (the tax options may be different, the investments, etc.)  Additionally, a pension usually can never be equalized against any other account, including another pension. The language in the settlement agreement should be clear to avoid any further disputes.

What if a pension reverts back to the owner upon his/her death?

Unfortunately, most pensions will often revert back to the owner/payee upon his/her death. This means that the alternate payee (other spouse) will no longer receive any benefit upon the payee’s death. It is important to find out whether or not the benefit will revert back to the owner prior to entering into a settlement agreement.

If it does revert back to the payee, there are a few things that can be done to balance out the cost/benefit. One of which is requiring the payee to maintain a life insurance policy for the benefit of the alternate payee. This will help to ensure that the alternate payee obtains his/her share of the pension. Another idea is requiring the payee to list the alternate payee as a beneficiary on his/her pension. This is usually only a reasonable solution, if the pension plan allows for multiple beneficiaries and/or the payee is near retirement age. For example, the payee can be required to list the alternate payee as a beneficiary to receive 25% of the benefit.


If you are unsure of any aspect regarding distribution of retirement funds, such as the survivorship benefits, if any; how the funds will be distributed; gains/losses; etc.; it is advised that you speak with an expert in the area or speak directly with the plan administrator of the retirement account prior to signing a settlement agreement. The parties’ intentions should be detailed in the settlement agreement. The more details that are provided in the settlement agreement, the easier it will be to transfer the accounts after the parties are divorced. This also helps to avoid future motion practice. 

For more information or assistance on a matter, please contact our offices.

[1] Military pensions have additional considerations that need to be considered that are not addressed herein.