In California, all retirement plans and related retirement benefits are considered community property. Community property is jointly owned by both partners in a marriage or domestic partnership. Under California's community property divorce law, if a couple divorces, a judge will divide all property, assets and debts evenly – as close to a 50/50 split as possible. This means your ex-spouse could receive up to 50% of your 401(k) and pension plan.
Even if you are the person who worked for the pension plan or accumulated the money in a retirement savings account, in the eyes of the law, both you and your spouse own equal shares of the asset. You and your spouse create a community, where everything acquired by either employed spouse becomes community property. Any earnings, savings or work benefits you acquire during your marriage are thus subject to division.
In a divorce case, a judge has the power to divide all community property down the middle, including retirement savings and work pension benefits. If, however, you and your ex-spouse can work out a settlement, you may be able to avoid the division of your 401(k) and pension plan. A divorce settlement prevents the matter from going before a judge. Another way you may be able to protect your savings is with a separate bank account.