How Colorado Courts Handle Pensions in Divorce

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By: Bill Henry
PublishedOct 21, 2021
1 minute read

If you work for the state or federal government, it’s quite possible you have a pension. When people get divorced, the other spouse is often entitled to a portion of this asset. Whether you hold the pension or may be entitled to part of it, t’s important to understand how this asset is handled during a divorce.

In this article, Robinson & Henry Lead Family Law Attorney Allison Sutton provides a great overview of this process.

Talk to a Divorce Attorney About Your Pension Rights

If you’re getting divorced and you have questions or concerns about your pension, call 303-688-0944 to begin a case assessment.

Dividing a Pension During a Divorce

Many employers are beginning to phase out the pension, but if you work for the federal or state government you may be part of the Federal Employees Retirement System or the Colorado Public Employees Retirement Association. And, of course, there are some private employers that offer it as an option.

How the Court Divides Pensions

There are three different ways the court can treat the division of this asset:
  • find the net present value
  • reserve jurisdiction
  • use a time rule formula

The first one is to have a financial expert determine the account’s net present value. In this case, one party will be awarded that lump sum in the marital asset balance sheet. That will offset and impact equalization.

The second way is to ask the court to reserve jurisdiction. That means that the court will decide how the pension will be divided at a later time. In this case, when the person who holds the pension begins to receive those benefits, the other spouse then can petition the court to determine its division.

Finally, the third way to deal with dividing this retirement asset during a divorce is to use a time rule formula. This calculation determines the marital share of the pension. The other spouse is entitled to half of the marital share.
Here’s what the time rule formula looks like:

      number of months married
number of months of eligible service

Talk to a Divorce Lawyer About Your Rights

Whether you’re the spouse who holds a pension or the spouse who may be entitled to some of it, it’s important to know your legal rights. Schedule a meeting with one of our family law attorneys to talk about your particular circumstances. Call 303-688-0944 to start your case assessment.

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