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Question: What should I assume with respect to how long the participant will work, and when she will retire?
Let's look at the hypothetical case of a state trooper who has been working 10 years. His accrued pension benefit is $2,500 a month. If he works another 10 years, is accrued pension benefit will be $4,500 a month.
He is 52 years old and seems likely to work until regular retirement at age 62.
First, let us observe it is standard to use benefit accrued to date, with the assumption that payment will not begin until regular retirement.
So you could use the $2,500 benefit amount, specify that the employee only has to work until the separation date, but specify the regular retirement date as the date that the pension will begin payment.
The other question is whether to use the $2,500 benefit accrued to date, or whether to assume that the employee will work the remaining ten years and will actually received the $4,500 benefit.
Lawyers and courts prefer to use the method accrued to date, because they do not like to speculate.
However, if what you are doing is negotiation outside of a court context, the decision is more fluid.
If you are representing one party or the other, the natural tendency would be to take the position that most benefits your party financially.
If you are representing the participant in this case, you would inclined to use the smaller benefit amount, to reduce the value of the benefit for negotiation purposes.
If you are representing the non-participant, you would be inclined to use the larger benefit amount, to increase the value for negotiation purposes.
If you are a financial neutral representing both parties, our suggestion is that you make your best guess as to what actually will happen.
In many cases, the best guess is that the person will continue to work until retirement.
If you use that assumption, in the software you would specify that the person needs to work until retirement to achieve that benefit, and you would enter the larger benefit amount.
Because you have specified that the person needs to work until retirement to achieve the benefit, the coverture fraction will go down, because the years working after the separation date will diminish the coverture fraction.
The result of these two entries would be that the marital portion will be a smaller portion (smaller coverture) of a larger number (larger benefit). The way pensions usually work, the net effect will be to increase the marital portion.
And you can always use a value somewhere in the middle.