Do I have to split my pension in a New York divorce?

Not necessarily. Mediation allows couples to negotiate different options, such as trading the pension for another asset or mutually agreeing to leave it untouched.

What happens if we don’t get a QDRO?

If a pension requires a QDRO and one is not filed, the retirement plan administrator will not process the division, meaning the non-employee spouse may not receive their share.

Can You Keep Your Pension in Divorce? | New York Divorce Mediation - Haas Mediation & Training | NY-based Mediation services specializing in divorce, family & support, corporate and religious faith mediation

Dividing Pensions in Divorce Doesn’t Have to Be Stressful

For many people, pensions represent years of hard work and a sense of financial security for the future. When divorce becomes a reality, it’s natural to wonder what will happen to this important asset. Unlike in court, where decisions may be imposed upon you, mediation allows you and your spouse to explore solutions together. Instead of feeling like you’re losing control, you get to create a plan that makes sense for both of you.

There is no one-size-fits-all answer when it comes to pensions in divorce. Some couples choose to divide them, while others agree that one person will keep their pension in exchange for other assets. In some cases, both spouses may decide not to include the pension in the division at all. Mediation provides the flexibility to explore these options and find a solution that meets both of your long-term financial needs.

At Haas Mediation, we guide couples through the financial decisions of divorce in a way that reduces stress and promotes clarity. If you’re wondering about the best way to handle a pension, schedule a complimentary, no-pressure call here.

How Are Pensions Treated in a New York Divorce?

In New York, pensions earned during a marriage are marital property, which means they are subject to division in a divorce. However, only the portion earned during the marriage is considered marital property—the part earned before marriage remains separate property and belongs solely to the pension holder.

How Are Pensions Valued in Divorce?

New York courts and mediators often use the Majauskas formula (from the case Majauskas v. Majauskas) to determine the non-employee spouse’s share.

Example Calculation Using the Majauskas Formula

A common approach to valuing pensions in New York is the Majauskas formula, which comes from the case Majauskas v. Majauskas. This formula determines what portion of the pension is considered marital property and how much the non-employee spouse may receive.

Spouse’s Share = (Years of Pension Service During Marriage / Total Years of Service) × 50%

For example:

A pension-holder worked 30 years and was married for 15 years.
The marital portion is 15/30 = 50% of the pension.
The non-employee spouse's share is 50% of that amount, meaning they would receive 25% of the total pension benefit.

Since pensions can be complex to evaluate, couples in mediation may choose to consult a financial expert to ensure a fair assessment.

What Are Your Options for Handling Pensions in Mediation?

Mediation allows couples to negotiate pension division on their own terms, rather than following a one-size-fits-all court ruling.

1. Full Pension Retention

The pension-holder keeps their pension intact and offers the other spouse assets of equal value in exchange. Options include:

Home equity
A larger share of 401(k) or IRA funds
Cash payout over time

This approach works well if one spouse values the pension more, while the other prefers liquid assets.

2. Splitting the Pension with a QDRO

The non-employee spouse receives a portion of the pension payments when they begin. This is done through a Qualified Domestic Relations Order (QDRO), which directs the pension administrator to pay a share to the former spouse.

3. Lump Sum Buyout

The pension-holder offers a lump sum or structured payments in exchange for keeping their pension intact.

Mediation ensures both spouses agree on a fair and workable solution, balancing long-term security and financial independence.

What Is a QDRO and How Does It Work?

A Qualified Domestic Relations Order (QDRO) is a legal document that allows a pension plan administrator to pay benefits directly to an ex-spouse. Without a QDRO, the pension plan will not process the division, even if both spouses agree to it in mediation.

Why Is a QDRO Important?

Ensures pension payments are made directly to the non-employee spouse.
Prevents legal disputes over pension division.
Avoids early withdrawal penalties and unnecessary tax burdens.

Government and military pensions follow their own set of rules and do not use a QDRO. Instead, they have different procedures for dividing benefits.

Key Considerations When Dividing a Pension

Tax Implications

Pension payments received through a QDRO are taxed as income. Trading a pension for another asset may result in different tax consequences.

Survivor Benefits

The non-employee spouse may want to negotiate for survivor benefits to ensure continued payments after the pension-holder’s death.

Future Retirement Planning

It’s important to consider how dividing or retaining a pension will impact each spouse’s long-term financial security.

How Mediation Helps Couples Navigate Pension Decisions

Unlike litigation, where a judge makes decisions for you, mediation allows couples to explore solutions that fit their unique situation. Mediation is:

Flexible – Couples have the opportunity to discuss and adjust pension division in a way that makes sense for their needs.
Cost-Effective – Mediation is often significantly less expensive than taking pension disputes to court.
Empowering – Instead of having decisions imposed, spouses work together to shape their financial future.

At Haas Mediation, we help couples create agreements that provide financial stability for both spouses. If you’d like to discuss your options, schedule a complimentary call today.