One of the more significant assets that may be up for division during a divorce is your income from your pension funds. In Colorado, the Public Employees Retirement Association covers most government employees.
Your pension fund under the Public Employees Retirement Association will have a defined benefit plan under which you will be paid a monthly stipend upon retirement. The stipend will depend on the number of years you have put in service, and other factors including your salary and your age at retirement. During a divorce, a court may decide to divide your defined benefit plan, and your wife may be eligible for benefits. Your wife might be eligible to receive payments throughout your lifetime, and as long as you continue to receive it.
However, for that to happen, the PERA plan must receive the domestic relations order, signed by the judge within a period of 90 days from the date of the decree of dissolution of the marriage. Once the division is completed, your wife will begin to receive a portion of your retirement benefits, but only when you begin to receive yours. In the case of a private retirement plan, a Qualified Domestic Relations Order will be issued by the court, which will be used to divide the pension.
Division is typically based on the number of months that you were married to each other, overlapping your employment divided by the total number of months that you were employed at the time of your retirement.
Division of pension funds can be one of the more catastrophic effects of the divorce on your finances. Senior males need to be especially wary about any unfair division of pension funds, because of the long-term impact on their finances. It’s important to consult with a Colorado divorce lawyer about the division of these important assets.