Basic Pension Principles

Family law and divorce is an aspect of the legal profession that is intensely personal. Clients involved in family law disputes need both personal and professional support to help them through a difficult, highly emotional time. They also need calm and reasoned decision-making. This is particularly true in marital community property disputes in which a pension must be divided.

Pension Plan Benefits

Pension plans:

• Reward employees for long and faithful service on the job
• Help companies attract and retain good employees
• Offer attractive tax benefits to employers and employees

Pension Marital Property

A pension is marital community property because it is a form of deferred wage of the employee. Other key pension principles include the following:

• When the marriage ends by divorce and marital property must be divided, the deferred wage aspect of a pension becomes important for consideration as an asset subject to allocation between the husband and wife.
   
• A good working definition of the present value of a pension is that it represents a sum of money today that will grow with investment results to provide a lifetime pension starting at a future date (if the person lives to the pension starting date).
   

• Glossary of Terms
• Frequently Asked Questions About Pension and Divorce