Division of Pension and Retirement Accounts

Pension and retirement accounts are, under Michigan divorce law, considered marital assets which are subject to division.  This is true even though the non-working spouse contributed nothing to the accumulation of the pension and/or retirement plan.  
In a divorce settlement pension and retirement accounts are commonly divided by one of two methods:  (1) awarding the non-employee spouse an actual present or future portion of the retirement plan or (2) by awarding the non-employee spouse assets or property equal to their share of the current value of the retirement plan. 

In the first method the court will either enter a “Qualified Domestic Relations Order” (QDRO) in which the pension plan administrator is directed to assign a portion of the employee’s retirement benefits to the non-employee spouse.  The non-employee spouse is then eligible to have a portion of the employee’s monthly retirement benefits sent directly to him/her by the company plan administrator.  In the second method the retirement asset is calculated for its present day value, which value the non-employee spouse is awarded the equivalent value of marital property such as a greater portion of the equity of the marital home, a financial account or other property to offset the present day value of the retirement asset.   In this way the employee keeps all of the retirement asset in favor of trading off for another asset.