What happens to my retirement accounts in a California divorce?

In California, all types of retirement benefits are considered community property, which requires the benefits to be divided upon a dissolution of marriage. Community property is the contributions you made and the service credit you accrued and/or purchased during your marriage or domestic partnership. Generally, your former spouse’s community property interest may be up to 50 percent of your retirement benefits.

If you began a retirement account before marriage, then your spouse is entitled to one half of the contributions and the services credits you accrued or purchased during the marriage, so you spouse would not receive 50 percent of your retirement benefits. These statements are true no matter what type of retirement accounts you have including 401ks, IRAs, Roth IRAs, private pensions, public pensions like CalPERS and military pensions.

How is my retirement divided?

When you own a pension, the plan administrator is under a strict duty to distribute pension payments to you in accordance with the terms of the plan. In order to direct payments to a former spouse, the plan administrator needs a qualified domestic relations order (QDRO). A QDRO is a special type of court order, and it is required regardless of whether you and your spouse settle your divorce amicably or have a trial.

With certain types of retirement plans, obtaining a QDRO requires joining the plan as a party to your divorce. This is a complicated process, and one that requires the help of an experienced divorce attorney. Examples of plans that require this joinder in order to obtain a QDRO include:

• State government plans, including CalPERS, California State Teachers’ Retirement System (CalSTRS), and University of California Retirement System (UCRS) plans.
• Federal government plans, including Civil Service Retirement System (CSRS), Federal Employees Retirement System (FERS), and Foreign Service Pension System (FSPS) plans.
• If you are a military officer, there are still more considerations that come into play. Under the Uniformed Services Former Spouses’ Protection Act (USFSPA)

Qualified plans covered by ERISA, including private company pensions, 401ks, deferred compensation plans, employee stock ownership plans (ESOPs), profit-sharing plans, and severance plans do not require joinder of the plan, but they still require a QDRO. Individual retirement accounts, IRAs and Roth IRAs, can generally be divided without a QDRO but the court judgment of divorce must address their division.