Texas Divorce Law...

Texas Law - What is the "Marital Portion" of a Defined Benefit Pension Plan?

The marital fraction of the pension plan generally is: the number of years married and employed, divided by the total number of years working until retirement or number of years working until divorce, whichever comes first.

This fraction is then applied to the value of the pension on the earlier of date of divorce or date of retirement.

Cases:

Parliament, 860 SW2d 144 (1993)(Husband had worked for telephone company before marriage. Pension formula was based on total months of service and salary in last five years. Court concluded that the community property fraction was: # months married under plan / total # months employed. This fraction was then multiplied by value at retirement. It appears, though the case does not state, that the parties were married at the retirement date.)

Sutherland v. Cobern (1992) 843 SW2d 127 (cost of living increases in military retirement pay, though occurring post-divorce, were not the separate property of the empl oyee, because they were not the result of post-divorce labor).

Humble, 805 SW 2d 558 (1991) (formula for the community property portion of a pension plan is: # years service during marriage / total # years service before and during marriage. In this case, they had been married 11.34 years, and the husband's total employment up to the date of divorce was 41.67 years. So 27% of the pension, calculated as 11.34 / 41.67, was community property. This fraction was then applied to the value of the benefit as of the date of divorce. The court awarded the wife half of this 27%, or 13.5% of the pension plan. The court said that any years of service after the divorce do not affect the community property portion).

Hudson, 763 SW2d 603 (1989) (The husband had been employed by Exxon for 292 months before the parties married. The parties then married and remained married at the time of husband's retirement. The husband's retirement benefits were based on all months of service, not just the last five years. To calculate the community property portion of the retirement benefit, The court used the fraction calculated as: # months of service during the marriage / # months total credited service. To get the community property amount, it then multiplied this fraction by the present value of the benefit as of the date of retirement, which was still during the parties' marriage. It awarded the cash value of this amount, which amounted to $188,800.72, to the wife.)

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