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Pensions and Divorce

According to New York State law, pension benefits earned during a marriage are marital assets subject to equitable distribution in the event of a divorce. The ex-spouse is entitled to a share of the Participant’s retirement benefit. A Participant and ex-spouse may establish a retirement benefit distribution that is satisfactory. The most commonly used equitable distribution formula for a public pension was established by the State Court of Appeals in Majauskas v. Majauskas. This formula provides an ex-spouse with one-half of that part of a Participant’s pension earned during the marriage.

The Majauskas Formula 50% × years of service credit accrued during marriage (numerator) ÷ total service credit at time of retirement (denominator) For example, if the Participant accrued 15 years of service while married, and retires with 30 years of total service, the ex-spouse’s share will be 25 percent of the pension (50 percent × 15/30). The Majauskas formula may be modified by the court, or by agreement between the Participant and ex-spouse. The Retirement System does not require use of this formula. There are other ways to distribute your pension benefit.

-Other equitable distribution choices: A flat dollar amount. This “locks in” an amount for the ex-spouse that will not vary if the Participant’s salary rises significantly prior to retirement. It will also affect the ex-spouse’s right to a share of the Participant’s cost-of-living adjustment (COLA).

A modification of the standard Majauskas formula (see above). Parties can negotiate the factors of the Majauskas equation.

A share calculated as of a specific date. The Retirement System can calculate a hypothetical retirement benefit using a Participant’s final average salary and service credit as of a specific date. The date most commonly used is the commencement date of the divorce action. An ex-spouse’s distribution can be calculated using the hypothetical retirement benefit. Any pension factor and age reductions applied to the Participant’s benefit upon retirement will also be applied to ex-spouse’s distribution. Any post-divorce salary and service increases will not be used in the calculation of the ex-spouse’s distribution. This generally provides the ex-spouse with a smaller portion of the Participant’s actual retirement benefit.

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