As it applies to divorce, the alternate payee is normally an unemployed spouse, usually a wife who was a stay-at-home mother.

Since the portion earned in a pension or retirement account during a marriage is subject to division, it is not uncommon for each spouse to keep 100% of his or her own account upon divorce or offset an account with another marital asset. Splitting each spouses pension is not the typical solution. If splitting a pension is the only option, it is done with a domestic relations order, which instructs the plan administrator to pay the Alternate Payee a specific percentage upon retirement.

See also Qualified Domestic Relations Order (QDRO).

Your Suggestion

1. Are You Getting Part of Your Spouse’s Pension?
   If so, once the divorce is final, you must draft a domestic relations order that will be signed by the judge. This document instructs the plan administrator to distribute the pension account as it is stated in your final judgment or decree for divorce. Many Alternate Payees forget to do this step, so years down the road they end up not receiving the funds they are entitled to.
   Contributed on 4/6/2007 by: DivorceDex.com Staff

   Category: Retirement Accounts   (Applicable in All States)

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