This is a Qualified Defined Contribution Plan. An employee may contribute each year up to the I.R.S. permitted annual maximum. In some forms of this plan there are employer contributions. The contributions are made pre-tax and are taxed upon distribution to the employee. The employee has the right to "rollover" all or a portion of the contributions to an I.R.A.

This is generally expressed as a monthly accrued benefit. Such form of benefit is limited to Qualified Defined Benefit Plans. It is expressed a an accumulation to a specific date and payable at a specific date. For example: William's monthly accrued benefit as of August 31, 2006 was $800.00. Assuming no further service this benefit will be payable upon William's attaining his normal retirement age.

As used in pensions this term relates to forms of an employee's benefit. It compares different forms of benefit payments and determines if they are mathematically equal or nearly equal. For example a monthly Single Life Annuity of $800.00 could be the actuarial equivalence of a Single Lump Sum of $250,000.00. This means they both have a dollar value of $250,000.00.

Any spouse, former spouse, child or other dependent of a plan participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such plan participant.

Periodic payments, generally monthly. The payment period can be for life or for a stated period, e.g. ten years.

The forms in which retirement benefits may be paid to a retiring employee. Among the options are: Single Life Annuity, Periodic Payments for a stated period or a Joint & Survivor Annuity.

A form of Qualified Defined Benefit Plan that has many features of a Qualified Defined Contribution Plan. It expresses the benefit is the form of a cash amount rather that as a monthly accrued benefit. The final benefit unlike most Qualified Defined Benefit Plans is payable in a Single Lump Sum.

This is the Federal Civil Service Retirement System. It has two components: CSRS and FERS. See both definitions below.

For pension purposes this is a post-retirement Cost of Living Increase to a retired person's pension. Generally these increases are based on the September to September changes in the Consumer Price Index as prepared by the Department of Labor. In virtually all plans these COLA increases are compounding. If you are reading this as an Alternate Payee, be sure to insert a COLA increase provision into your Property Settlement Agreement.

For property acquired during the marriage there is a presumptive basis that this is joint property.

A coverture fraction is the method used to determine that portion of the benefit which was earned during the marriage through date of separation, from that portion of the benefits which were earned outside of the period of marriage. The coverture fraction represents that portion of the value of the benefits attributable to the community property. The numerator of the fraction represents the total period of time the participant-spouse participated in the plan during the marriage through separation, and the denominator is the total period of time the participant-spouse participated in the plan as of the date the non-participant spouse’s benefit is calculated.

Any form of compensation other that the direct wage or salary of the employee.

A form of settlement that requires a Domestic Relations Order. The Alternate Payee must generally wait until the actual retirement of the employee to collect his or her pension benefit. It is possible for an Alternate Payee to begin collecting a benefit at the employee's Earliest Retirement Age. Alternate Payee's are strongly cautioned against beginning to collect prior to the earlier of the employee's normal retirement age or actual retirement. Reason: Under the federal pension a substantial actuarial reduction will be imposed on the Alternate Payee's pension benefit.

A form of pension that guarantees the employee a stated benefit at his or her retirement. This benefit is actuarially determined and does not depend on investment gains or losses. The form of benefit paid under this type of plan is generally a monthly annuity.

Retirement benefits are considered marital/community property. Upon divorce this asset will be divided between the parties incident to a Property Settlement Agreement or imposed by a court as a result of a trial. In all states other than Florida and Texas some form of the Coverture Fraction (Time Rule) discussed above is used to determine the respective shares of the parties.

As used herein it is a written instrument delineating the marital/community property interest of an Alternate Payee in the pension benefits of the employee. This Order is without effect until it is executed by a court and then "Qualified" by a plan administrator.

A participant's earliest retirement age is specified in the Plan document. There is no federal law mandating that a Defined Benefit Plan contain an early retirement provision. Nevertheless, the majority of these plans permit retirement prior to normal retirement age (defined below).

The key piece of federal law relating to pensions and divorce. Employee Retirement Security Act.

A Non-Qualified Plan that provides an executive with a pension in excess of the limits permitted for general employees.

For federal and military plans use this term in place of "Alternate Payee".

Under both Federal Civil Service plans this is a survivor annuity for the exclusive benefit of the prior spouse. It can be as little as $1.00 per month or to a maximum of 55% of the employee's total retirement allowance.

Individual Retirement Account. Technically, this is not a pension plan. However, it is divisible upon divorce. Moreover, a Qualified Domestic Relations Order is not required.

An annuity payable as a result of the death of a retiree. This form of survivor annuity is payable after the death of a retiree. This is not the form of survivor benefit payable as a result of the death of an employee prior to retirement. See QPSA.

An annuity payable for the lifetime of the retiree. Upon the death of the retiree all payments cease. There is no survivor component to this form of annuity.

The age stated in a plan document when a plan participant may retire without any reduction in accrued benefit.

A formal Order of a court dividing marital/community property pension assets. This Order requires the approval of the Plan Administrator of the plan that will be distributing assets to both spouses.

The various forms in which a retiring employee may receive his or her pension benefits. Among the major options are: Single Life Annuity, Joint & Survivor and period certain (e.g. an annuity certain[guaranteed] for 10 years).

Generally a non-taxable event in which assets are transferred from either one pension plan to another or from a pension plan to an IRA for the benefit of an alter.

A form of Qualified Defined Contribution Plan. This is an individual account balance plan. To know the worth of this plan obtain an account balance statement from the employee's employer.

This form of Domestic Relations Order assigns to an Alternate Payee a portion of the titled-spouse's monthly accrued benefit as his or her sole and separate property. It is the view of this firm that not all ERISA employers fully accept this format. It is strongly suggested that you question the Plan's Administrator to determine if this separate interest becomes effective upon qualification of the Domestic Relations Order or upon the actual retirement of the titled-spouse.

This form of Domestic Relations Order does not automatically give an Alternate Payee an interest that is payable over the lifetime of said Alternate Payee. To insure that payments to this Alternate Payee are not extinguished by the death of the titled-spouse it is necessary to specifically award in the Property Settlement Agreement that the Alternate Payee is entitled to both QPSA (see above) and Joint & Survivor Annuity benefits.

Upon retirement an annuity that is payable over the lifetime of the titled-spouse. Upon his or her death all payments cease. To avoid this outcome for an Alternate Payee you must use either a Separate Interest QDRO or award an Alternate Payee both QPSA and Joint & Survivor Annuity benefits.

A Non-Qualified Plan. There are two forms: Non-Qualified Stock Options and Incentive Stock Options (ISO). You must be familiar with the differences, especially the tax treatment upon distribution to either the employee or an Alternate Payee.

The point when an employee's pension benefit is not subject to forfeiture.