While calculating the actuarial value of a member’s pension for purposes of a complete buyout may be inappropriate in some circumstances, obtaining an actuarial valuation from a qualified expert may still prove extremely useful to the family law attorney and client.
(a) What if the clients have agreed for the nonmember to retain the family home and wish to partially offset the nonmember’s interest in the PERA pension against the equity in the home? It is possible to award the nonmember less than 50% of the community property interest in a Domestic Relations Order (e.g. 43.50% of community), whereby the 6.5% reduction is actuarially equivalent to one-half of the equity in the family home.
(b) Perhaps the parties have been separated for a long time and member has been collecting their pension without paying a portion to the nonmember? It is possible to actuarially value the prospective pension and increase the nonmember’s percentage share as reimbursement for past pension payments in arrears.
Regardless of whether the parties are entertaining the idea of a complete buyout or partial offset of the nonmember’s community property interest in a public retirement plan, obtaining an actuarial valuation is a quick and cost effective way to ensure all parties understand the true value of what is commonly the most valuable asset in a divorce.
Moon, Schwartz & Madden have been qualified as experts in California in the actuarial valuation and division of retirement plans, including survivor benefits, since 1993 and now offers these services in New Mexico and Arizona. We are members of the “QDRONEs” which is a national educational society of lawyers, actuarial consultants, and other QDRO professionals. www.msmqdros.com