Division of Retirement Benefits
Often, retirement benefits are the most valuable asset a couple has to divide. It is therefore imperative that you have early and accurate information regarding the division of any retirement assets and an attorney who understands how to properly value and divide these assets.
NEBRASKA LAW REGARDING RETIREMENT BENEFITS
Nebraska law considers vested pensions to be marital property subject to division. Unvested pensions only provide the non participating spouse with an expectancy interest in the pension. There are various ways to value pensions in Nebraska, and if the parties do not ultimately agree on a value, they may be required or ordered by the court to bring in a neutral expect to perform a pension valuation.
THE DIFFERENT TYPES OF RETIREMENT BENEFITS
Retirement benefits can vary greatly, especially between the private and public sectors, but generally you can think of retirement benefits as fitting into two general groups:
- Defined benefit plans – these were plans people often knew as “pensions,” are far less common today than in the past. In a defined benefit plan, the employer promises to pay a set amount to the retiree over a certain period of time (usually until the retiree’s death). The amount is often based on a calculation including salary and years of service. These plans are far more complicated to divide than defined contribution plans.
- Defined contribution plans – In these plans, the employer and/or the employee make defined contributions during the employee’s employment tenure, which are then paid out after retirement. The most common of these are 401(k)s and 403(b)s. The types are plans are usually divided with a Qualified DOmestic Relations Order, which is prepared by the parties’ attorneys, and they are far easier to value and divide than defined benefit plans.
The divorce attorneys at Nebraska Legal Group, P.C. have specialized knowledge in division of all forms of retirement accounts, including military retirement.