{3:30 minutes to read} When I began practicing family law, one of the first lessons I learned was that clients do not consider all assets the same. The one asset that consistently holds a very special place in the heart of a client is a pension.
Clients express feeling a different sense of entitlement to their pension because:
Whatever the reason, it is difficult for them to consider sharing their pension.
Objectively, the pension holder understands that if they made contributions to this benefit and the employer matched those contributions, such as in a 401(k), there is no question that the account would be a marital asset to be shared with their spouse.
They also understand that if they were at a job where they actually earned more in salary because there was no pension benefit provided by the employer, and that salary was then accumulated in other assets, that, too, would be shared equally with their spouse.
On an emotional level, however, it just feels profoundly different to be told you have to share a pension versus sharing a 401(k) or IRA account.
There are ways to address this in mediation. The first step is to have a discussion as to the importance of the pension to the party so that their reasoning and beliefs are on the table. It is also good to discuss the expectations that the other spouse had for sharing in those pension benefits when they both retired and choices that he or she may have made based on that expectation.
In terms of the distribution, the most even-handed way to divide a pension would be to enter an order for the parties to share the future payments when the pension holder retires. But it is the parties’ asset, and the most even-handed division may not work for them. They should decide how best to divide it, and they may consider the following:
These types of discussions, at the very least, permit each party to be heard and understood. Hopefully, it will also lead to more creative resolutions on this sometimes sensitive issue.