Many people are surprised to discover that retirement pensions acquired during a marriage are subject to division as community property. This means that there is a community interest in all pensions and pension rights acquired from date of marriage to date of separation. The percentage of the pension deemed to be community is determined by dividing the number of months that the employee spouse was in the pension during the marriage (prior to separation) and dividing that figure by the total number of months that the employee spouse was in the pension, prior to marriage, during marriage and after separation. The result is the community property percentage of the pension. The non-employee spouse is awarded one-half of that community portion. The non-employee spouse receives his or her share of the pension by an order signed by the court in addition to the divorce judgment, known as a Qualified Domestic Relations Order (QDRO).
QDROs must be carefully drafted to comply with all pension and tax law to and assure both spouses of an equal division of the community portion of the pension including any survivor benefits.