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Divorce and pensions: 3 things to know

Are you already receiving pension benefits and are now filing for divorce? If so, there are three things you should know about how the divorce will affect your pension.

First, both 401k plans and traditional pensions are marital assets during a divorce and can be split during a divorce. If the pension is yours, then your soon-to-be ex-wife is entitled to half of the benefits. You need to determine how much your pension is worth. This is done by contacting the administrator for the plan. You should also ask for a copy of the plan's description, which contains the rules, including whether it has a cost of living adjustment and if there are survivor benefits.

Next, your attorney must determine how to file the qualified domestic relations order. This can also be done by contacting the administrator. The process of filing the QDRO must be followed precisely, because any error can stop the split.

Finally, you will need to find out when the total amount of the pension was calculated -- was it when you retired, when the divorce is final or some other date? This could greatly affect the amount of your pension.

It's important that anything done with your QDRO is done correctly. A rejection of the QDRO can require resubmission, which can take a great deal of time. In some cases, the acceptance of the QDRO by the plan's administrator can be the only thing holding up the final divorce order. Your attorney will ensure that the paperwork is filed correctly and that your ex gets his or her share of the pension to which he or she is entitled.

Source: wotv4women.com, "What happens to my pension during divorce?," Gail Saukas, Jan. 13, 2017

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