Joinder of Pension Guide
What is joinder? Why would I need to join a pension?
You should use this Joinder of Pension Guide to understand what joinder means and how pensions are joined in a divorce proceeding.
A joinder of pension may be required when you file for divorce. Pensions are often one of the most significant assets to be divided in a divorce action. You should join all pensions to avoid having to return to court at a later date.
This guide discusses how California community property law provides certain mechanisms for dividing investment accounts, retirement accounts, and pension plans. The focus of the Joinder of Pension Guide is on the division of pension retirement assets in divorce and legal separation cases in the State of California. Be aware that dealing with complex issues of dividing a pension and other defined-benefit plan retirement assets in divorce cases may be overwhelming. You may want to consult with an attorney before taking legal action. This Joinder of Pension Guide page is intended to provide a basic understanding of what you, a divorcing litigant, should know about how the a California Superior court will handle the division of a defined benefit asset in your divorce.
Community Property or Separate Property
Is a pension community property? Is a pension separate property?
Community property is any property that is not acquired before marriage, after the date of separation, by gift, or inheritance. Separate property includes all assets and debts that are acquired before marriage, after separation, by gift, or inheritance. All appreciation and accumulations take-on the character from which it is derived. Community property is divided equally between the parties. Separate property is awarded to the party that owns the separate property interest. The community interest of a defined benefit retirement asset is the portion acquired from the date of marriage until the date of separation. The separate property interest of a defined benefit retirement asset is the portion acquired either before marriage or after the date of separation. Pensions can be part community property and part separate property. Only the community property portion of the benefit will be divided equally.
Understanding Pensions and Defined Benefit Plans
What is a defined benefit plan? What is a defined contribution plan?
Defined contribution plans are more commonly known as profit sharing benefits. These can be 401(k) plans, stock, stock options or restricted stock units (RSUs). Most government positions, including local and state jobs, have a defined benefit component as compensation. Defined benefit plans provide a fixed, pre-determined benefit for the employee upon retirement. The asset is valued by the amount of the benefit that will be paid at retirement. Common types of defined contribution plans in California include:
- California Public Employees Retirement System (CalPERS);
- California State Teachers and Educators Retirement System (CalSTRS).
Notice of Joinder of Pension to CalPERS and CalSTRS
Why do I need to join a plan?
For CalPERS and CalSTRS to comply with a court order to divide a pension, they must be joined. You will need to research the pension plan rules for any plan involved in your case.
Joinder of Pension Forms
Are there joinder forms?
There are several forms that are required to join a pension or employee benefit plan in a divorce case. Technically, when a pension plan is joined to a divorce case they actually become a party to the case. It is important that the proper forms and procedures to join the plan are followed. In short, pension plans are joined to a case by filing a Request For Joinder. The documents are completed and filed with the court clerk. The clerk will issue a summons that will notify the plan administrator. The procedures are now streamlined eliminating the need for a hearing. The required forms are:
- The Information sheet on Retirement Plan Joinder, Form FL-318-INFO;
- Pleading on Joinder – Employee Benefit Plan, Form FL-370;
- Notice of Motion and Declaration for Joinder, Form FL-371;
- Request for Joinder of Employee Benefit Plan, Form FL -372; and,
- Summons (Joinder), Form FL-375.
You will also need to serve a copy of the plan according to the law. The “proof of service” must be filed with the court. A blank Responsive Declaration to Motion for Joinder – Consent Order of Joinder, Form FL-373 must also be served.
Identifying the Claimant
The “claimant” is the actual employee of the benefit plan (pension). The claimant is served with a joinder request. The party that is being sought to participate in the civil case is called a Claimant.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law. ERISA sets minimum standards for most voluntarily established pension and health plans in private industry. These standards provide protection for individuals in these plans. ERISA may play a role in your case for a order to divide the asset. You must comply with ERISA law.
Joinder of Pension for an Employee Benefit Plan
Joinder is the adding of a third party to a pending civil case (including divorce). Employee benefit and contribution plans are joined in divorce cases. The joinder process is relatively simple. Employee fixed benefit plans are automatically joined upon request of a party and the filing of the appropriate paperwork.
Procedure for Joinder Procedures
The process to add a pension administrator or defined benefit plan to a divorce action is governed by statute. Family Code § 2060(a) states that upon written application by a party, an employee benefit plan that either party claims an interest shall be joined by the court clerk. You will need such information as the party’s name, Social Security Number for the plan participant, plan number, name of the plan, and the contact information for the plan administrator. Family Code § 2062 requires the joinder to be served on the plan administrator. You will need to give them all the filed joinder pleadings which includes a summons. When the joinder is served on the plan, the plan will be required to file an answer within 30 days.
Joining an Employee Benefit Plan in Divorce Cases
It is imperative to join the plan in a divorce cases where:
- The employee-spouse is at or close to the age of retirement;
- The spouse has the ability to take loans against his or her interest in the benefit plan assets;
- Where the employee-spouse has the ability to withdraw funds; or,
- Where the employee-spouse is already receiving monthly benefit payments.
Joining the plan protects the non-employee-spouse’s interest in the plan benefits. Considering that the non-employee-spouse’s interest is one-half of the total benefits accrued during marriage, the interest could be significant.
We hope that you have found our Joinder of Pension Guide helpful. Please contact our office should you wish to retain an attorney or further discuss your case.
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For additional information on dividing pensions during divorce, click on one of the following links: