Avoiding Pension Pitfalls in Divorce

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Sep 2
5 min read

By: Jarbath Pena Law Group

When you’re facing a divorce or just contemplating the possibility, it can feel overwhelming. You may be juggling countless emotions and worries. How will this affect my children? Where will I live? Can I afford this on my own? With so many concerns, it’s understandable if some financial details get pushed to the background.

One of those details, though, deserves your full attention: how a court divides pensions in divorce. This isn’t just another line on a settlement sheet. Pensions can represent decades of work and a significant portion of your financial future. Overlooking or mishandling them can have lasting consequences, sometimes locking you into unfavorable outcomes for years.

Today, the lawyers of the Jarbath Peña Law Group will walk through how Florida courts approach pension division, why this issue can be especially tricky, and how you can avoid common, potentially costly mistakes.

A General Overview of Property Division in Florida

In Florida, the process of dividing property in divorce follows the principle of equitable distribution. This means the court aims to divide marital property fairly, though not always equally.

Courts consider a variety of factors when determining what is equitable, including:

The length of the marriage;
The current financial circumstances of each spouse;
The future financial needs of each spouse;
Pre or postnuptial agreements;
Each spouse’s debts and liabilities;
Each spouse’s contributions to the marriage, including as a homemaker;
Interruptions to either spouse’s career or education due to family reasons; and
The desirability of keeping certain assets, like a business, intact.

These factors help ensure that property division reflects the unique circumstances of each marriage. Typically, courts treat pensions and retirement accounts as marital property, at least in part, and subject them to these same considerations.

Overview of Pension Division in Divorce in Florida

Pensions hold a unique place in divorce proceedings because they often represent deferred compensation, i.e., benefits earned over time but payable in the future. This deferred aspect makes them more complex to value and divide than other assets—like bank accounts or real estate.

In Florida, courts generally consider the portion of a pension a spouse earned during the marriage marital property and subject that portion to equitable distribution. Conversely, a judge could treat any portion earned before the marriage or after separation as separate property. However, pinpointing the exact value and properly dividing it often requires legal and financial experience and skill.

Courts have two primary ways of dividing pensions:

Offsetting. One spouse keeps the pension, and the other receives a larger share of other marital assets to compensate.
Deferred distribution. The judge divides the pension between the spouses at the time benefits are paid out, typically through a Qualified Domestic Relations Order (QDRO).

Both methods require careful planning and a clear understanding of the pension’s terms and future value.

Common Mistakes Made When Dividing Pensions During Divorce

Dividing pensions isn’t just about getting a fair deal on paper—it’s about safeguarding your finances long after the divorce is finalized. Several mistakes come up again and again in divorce cases, often with significant consequences.

One Spouse Is a Homemaker

If you were a homemaker, you gave up your career and long-term earning capacity to support your spouse’s career and care for your family. Therefore, you likely also forfeited many years’ worth of building up your own retirement savings or pension. Florida law acknowledges this contribution, but judges can overlook or undervalue it during divorce settlements. You need an attorney who knows how to help ensure that the judge acknowledges and properly accounts for your sacrifice.

Timing of Benefit Accrual

Pensions don’t always grow at a steady rate over time. In fact, many pensions are structured so that their value increases significantly toward the end of a career. This can create serious pitfalls if not accounted for properly during divorce negotiations.

Some pensions are back-loaded, meaning they grow faster as the employee nears retirement age. This reality makes it critical to consider the future projected value of the pension, not just its current value.

Overlooking this growth pattern can result in an unfair division and a significant financial loss for the spouse entitled to a share.

Working for the State

State employee pensions often come with specific legal protections and administrative rules that differ from private pensions. Misunderstanding these rules can create real problems in dividing the pension properly.

Unique aspects of state pensions may include:

Restrictions on how benefits can be assigned or divided in divorce,
Specific language requirements for QDROs or similar orders,
Different calculation methods for pension benefits, and
Special rules about survivor benefits or beneficiary designations.

Assuming state pensions function like private pensions is a common mistake that can delay payments or result in receiving less than anticipated. Understanding the specific rules governing public pensions is critical for both parties.

Working for a Railroad Company

Railroad employees’ pensions are governed by the Railroad Retirement Act (RRA), a federal law that has distinct rules that differ from other retirement systems. This difference can significantly impact how the court divides pensions in a divorce.

Some railroad retirement benefits can be divided in a divorce, while others cannot. Knowing which is which can be crucial.

Failing to understand the unique aspects of the Railroad Retirement Act can lead to incorrect assumptions, faulty legal documents, and loss of benefits. It’s important to work with professionals familiar with federal pension laws if either spouse worked for a railroad.

How to Fix Mistakes in Pension Division

Whether it’s a miscalculation, a drafting error, or a misunderstanding of the law, if you’ve discovered a mistake in how your pension was divided during your divorce, all hope is not lost. However, fixing these errors isn’t always straightforward and may be subject to strict legal limits.

In some cases, the court may allow for the correction or clarification of a QDRO or similar legal document, especially if the original terms were ambiguous or improperly executed.

Potential remedies include:

Corrective QDROs. A revised QDRO may correct mistakes or clarify ambiguous language.
Motion for Relief. If there was a significant legal or factual mistake, your attorney can file a Motion for Relief to seek a fair remedy. However, this involves another court process, so it’s best to get the division correct the first time around.
Negotiated settlements. Sometimes, former spouses can agree to amend the division voluntarily and submit their agreement to the court for approval.

While these options may offer relief, they often depend on acting promptly and having solid legal grounds. If you suspect an error, it’s wise to consult an experienced family law attorney right away.

Final Thoughts

Attorney Melisa Pena and Attorney Fritznie Jarbath Immigration and Family Law Attorneys

Dividing pensions in divorce isn’t just a technical exercise—it’s a critical part of securing your long-term financial stability. With a variety of potential pitfalls, it’s easy to make mistakes that could follow you for years. Whether you’re the spouse who earned the pension or the one who supported the household in other ways, you deserve a fair and accurate division of assets that reflects your contributions and protects your future.

If you’re going through a divorce or even considering one, don’t leave your financial future to chance. The experienced attorneys at the Jarbath Peña Law Group are here to help you navigate every aspect of your divorce, including the often-overlooked issue of pension division. We’ll work with you to protect your interests and help you avoid costly mistakes.