Can the divorce be modified if retirement wasn’t addressed?
Whether you have been divorced for one month or 15 years, a modification to your divorce decree can be performed to reflect your present-day situation. And, yes, you may petition a New York court to address the issue of retirement benefits in your divorce decree. It is a straightforward process. If you and your ex-spouse have conflicting views regarding the issue, then proceed with filing for a modification. Attend the scheduled hearing and present your evidence. Of course, it would be in your best interest to hire an attorney who is well-versed on the subject. You need someone who will meticulously review the details of your divorce and explain to you how and why you are at this point. Clearly, due diligence was not performed during the divorce.
New York law views pensions, which are also known as retirement benefits, as marital property. This means that since the retirement benefits were earned during the course of the marriage, then they are considered to be marital assets. As such, they need to be divided fairly between the ex-spouses.
Typically, such a division is achieved by employing the Majauskas Formula. With this formula, the ex-spouse is actually entitled to one-half of the employee’s retirement benefits earned during the marriage. The Majauskas Formula is calculated as follows: 50% * (service years during marriage/total service years at retirement).
For example, if the employee accumulated 25 years of service during the marriage, and he retired with 40 years of total service, then the ex-spouse will receive 31 percent of the retirement benefits (50% * (25/40)).
It should be noted that usage of the Majauskas Formula is not mandatory. It can be changed by the court. Or, the ex-spouses can agree to change it. Also, the New York State and Local Retirement System (NYSLRS) does not mandate use of this formula. Plus, equitable distribution of retirement benefits can be achieved in other ways. They include the following:
• By establishing a flat dollar amount. The ex-spouse will receive a predetermined amount. This amount will not change. It will not affect the employee’s salary or cost-of-living adjustment.
• By changing the original Majauskas Formula. The formula can be tweaked to the liking of the ex-spouses.
• By calculating an amount as of a specified date. The NYSLRS can calculate a fictional retirement benefit whereby the ex-spouse’s share is tied to a specific date. The calculation involves the employee’s final average salary and service years on a specific date. Generally, the target date is the date the divorce proceedings began. If the employee’s retirement benefit suffers any pension issues or age reductions, then the ex-spouse’s benefit will suffer the same. However, the employee’s salary and service increases earned after the divorce will be excluded from the ex-spouse’s benefit calculation. This action places the ex-spouse at a disadvantage. The ex-spouse will receive a smaller percentage of the employee’s actual retirement benefit.
If the desire is to restrict the ex-spouse’s retirement benefit to the employee’s salary and service levels in place at the start date of the divorce proceedings, then this should be explicitly conveyed in the Domestic Relations Order (DRO). A DRO is court decree whereby the ex-spouse receives a share of the employee’s pension upon the employee’s retirement. A DRO is a set of directives that details how the retirement benefit is to be divided. It does not leave any room for speculation because it explicitly states how the benefit will be calculated, when it will be paid and how it will be paid. A DRO should be drafted by someone who is quite familiar with the subject. And, a DRO should be in place before the divorce is completed.