Beware Of The Extra Benefits Included In Your Retirement Plan

divorce retirement accountsBy Jennifer M. Paine

Divorce Lawyer, Cordell & Cordell

When most guys think about their retirement payout, they envision a set dollar figure they will receive every month when they retire. This is true, usually, but there are a lot of things that make up that dollar figure.

Most guys know about the basic benefit – the “set” figure they anticipate receiving. In addition to that basic benefit, your retirement plan may include ancillary and component benefits, or “the bells and whistles.”

In most states, these too are marital property to be divided between you and your ex.

Examples of ancillary and component benefits: your retirement plan may offer adjustments for the cost of living, survivor benefits, early retirement supplements and subsidies, a lump sum “buy out” amount, and a host of other adjustments to your basic benefit and payments in addition to your basic benefit.

Interestingly, while the basic benefit division law is clear, the law applicable to ancillary and component benefits is not. Thus, this is your first opportunity for negotiating.

Always consult a divorce lawyer for the laws applicable in your case, but you are likely to find that these benefits are not automatically half of each spouse’s or, if they are, only when specifically stated.

For example, in some states an ex-spouse is not entitled to a share of survivor benefits (the benefits paid to your named survivors when you pass away) unless her entitlement is specifically stated in the divorce decree. The same may apply to early retirement benefits.

So, a clause stating your ex is entitled to “one-half of retirement account X” may exclude the “bells and whistles” when you actually retire years later. The result is a larger payout to you because your plan does not have to set aside money for her.

Too bad for her, but good for you.


Read the other divorce articles in our retirement advice series:


Jennifer M. Paine is an Associate Attorney in the Detroit, Michigan office of Cordell & Cordell. She is licensed to practice in Michigan, and has been admitted pro hac vice in Illinois, Ohio, and the United States Court of Federal Claims.

Ms. Paine received her BA in English and Mathematics from Albion College and graduated Summa Cum Laude. She received her Juris Doctorate from MSU College of Law and graduated Summa Cum Laude.

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