These court orders direct the plan administrator of your retirement plan to segregate funds for the benefit of your spouse at the current time, if available under plan rules, or at the time when the employee spouse reaches retirement age. In many states, even if the judge divides marital property on the basis of an equitable division, the retirement benefits accumulated during the course of the marriage are divided equally. There are generally three issues that must be considered when discussing retirement benefits. The first issue is the question of the value of the retirement funds. Generally, the values of funds in a 401K, profit sharing or deferred income account are easy to determine.
Problems arise, however, when attempting to value a pension plan.
A pension plan generally provides for the award of a monthly amount at the time you or your spouse reach retirement age. For example, many pension plans award a certain dollar amount per month at retirement for every year of service. Obviously, on first glance, we would only then be able to determine the monthly amount an employee would receive at retirement. At the same time, this would not answer the question of how much the pension is worth today. To assist with this determination, some pension plans provide information as to the cash value of the plan if liquidated on a certain date.