Hot Tips for Pension Issues in Divorce
Get a second opinionI have seen pension reports and QDROs that have either been written for the benefit of the party requesting the work and skewed to that end or had out and out mistakes. These pensions can easily be worth hundreds of thousands of dollars and mistakes can be huge. One big example is the assumption of what age of retirement to use which assumption can, in itself and of itself, cause a variation of $100,000. With this much at stake, it pays to be sure. Get the Plan Summary Booklet and understand all the terms offered.
Make sure you have discovered all benefitsMany employers have both pensions and savings accounts. Some employees will additional retirement savings through affiliated associations or as optional retirement savings. For example, Union electricians can belong to a local with a pension and an annuity and also have national benefits with the IBEW and NEBF. Union Carpenters can have a pension and annuity and then also a savings plan. Some employers offer health insurance reimbursements after retirement. It pays to be sure all accounts are discovered. Get an authorization against the employer and any union to discover all the benefits offered.
Check the plan calculationsMost of the time the Plan/Employer gets it right but I have seen mistakes in my practice. After the divorce, the Plan may miss-interpret the QDRO. The QDRO is not a standard document for them and the calculation is likely not part of their every day responsibility. I was recently consulted in a non-divorce early termination case of a local government employee and they used the wrong actuarial table resulting in a $400 per month shortfall. It pays to make sure you get what you are entitled to. Get the Plan Summary booklet and replicate the calculation.