As a Dallas-based divorce and child custody attorney, I understand that the process of ending a marriage can be overwhelming and emotional. One of the most important, yet often overlooked, aspects of divorce is the division of retirement benefits. Whether you’re the employee or the non-employee spouse, it’s crucial to understand the laws and processes involved in dividing these assets.
In this blog post, I’ll explain the basics of dividing retirement benefits in divorce and provide tips for protecting your interests.
What is ERISA and How Does it Affect Retirement Benefits?
The Employee Retirement Income Security Act (ERISA) is a federal law that was enacted in 1974 to protect the interests of employees who participate in employer-sponsored pension plans. One of the key provisions of ERISA is the anti-alienation provision, which prevents plan participants’ benefits from being assigned or alienated in any way.
However, there are exceptions to this rule, including Qualified Domestic Relations Orders (QDROs). A QDRO is a state-issued order that relates to the provisions of child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent of a plan participant. A QDRO begins as a domestic relations order (DRO) and becomes a “QDRO” once the plan administrator deems the order qualified.
What Types of Retirement Plans are Covered by ERISA?
Not all retirement plans are covered by ERISA. Private retirement plans that are qualified under ERISA include defined benefit plans and defined contribution plans, such as 401(k)s and 403(b)s. Military retirement and federal employee plans, like the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS), are not covered by ERISA and are governed by federal law. State plans, such as the Teacher Retirement System (TRS) and the Texas Municipal Retirement System (TMRS), are also governed by state law and may also use the term “QDRO.”
Tips for Protecting Your Retirement Benefits in Divorce
- Understand the type of retirement plan you have. Knowing whether your plan is covered by ERISA, federal law, or state law will help you understand the process for dividing the benefits.
- Consult with an experienced attorney. An attorney who is familiar with the laws and processes involved in dividing retirement benefits can help you navigate the process and protect your interests.
- Consider negotiating a settlement. In some cases, it may be in your best interest to negotiate a settlement rather than going through the court process.
- Act early. It’s important to address the division of retirement benefits early on in the divorce process. The sooner you act, the more options you may have for protecting your interests.
Contact The Blacknall Firm
If you are facing a family law issue and need representation, contact the Blacknall Firm today. Our team of experienced family law attorneys is dedicated to helping our clients achieve the best possible outcome in their cases. Let us put our skills and knowledge to work for you.