Divorce Dex.com: Deferred Compensation Package

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Definition Deferred Compensation Package - includes all retirement assets, such as pension, 401(k)s, IRAs, and any variety of saving or postponed income schemes accumulated during the marriage.

Application in Divorce The value of deferred compensation packages is sometimes difficult to calculate and very often requires the services of professionals, particularly in the case of high-income professionals or top managers. These assets often have present and future values that make them very valuable, and sometimes these packages appreciate both actively and passively.

Retirement assets, which are subject distribution in a divorce, should be evaluated carefully. The date of separation is very important in determining their distribution.

The distribution of a deferred compensation package is a leverage factor, particularly for women married to men in high paying jobs. Very often these woman have forsaken careers to advance the careers of their husbands or have made large noneconomic contributions to the marriage.

See also Leverage Factor.

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Questions & Answers

What is the Deferred Distribution Method?

The Deferred Distribution Method of dividing a pension provides for the division of benefits to take place at a later date, when the benefits are actually being paid by the plan. This type of distribution is usually accomplished using a court order or Qualified Domestic Relations Order (QDRO).

Contributed on 9/19/2007 by: Pension Appraisers, Inc. Allentown, PA [Total Contributions: 12]

Category: Retirement Accounts (Applicable in All States)

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Helpful Tips & Facts

A Pension is a Marital Asset
In a divorce many women, particularly women who have been homemakers and out of the work force to raise children, re-enter single life without any pensions of their own. A husband’s pension is marital property and subject to distribution.

Contributed on 6/28/2007 by: DivorceDex.com Staff
Category: Retirement Accounts (Applicable in All States)

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Additional Resources

Dividing Deferred Compensation Plans

Deferred compensation refers to pension plans, 401K plans, IRAs and other retirement assets. Such plans are divisible as part of a property settlement in divorce regardless of which party is named on the plan. How they are divided depends on the value and nature of the asset.

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