Your Pension is a Major Community Asset
In California, assets earned during a marriage are generally considered community property, meaning they belong equally to both spouses. This includes the pension benefits earned by either spouse from the date of marriage to the date of separation.
It's crucial to understand how this valuable asset will be divided, as it can significantly impact your long-term financial security.
The Two Paths: How Your Pension Divides
"Separate Account" Plans
Common in CERL systems (like TCERA), these plans create a new, separate account for the non-member spouse. This provides a clean break, giving you full control over your share, including when to retire and who to name as your beneficiary.
"Shared Payment" Plans
Common in non-CERL systems (like SLOCPT), your benefit is a "share" of the member's future payments. You don't have a separate account, and your payments are tied to the member's life and retirement choices, creating significant risks.
The Survivor Benefit Trap in "Shared Payment" Plans
This is the single biggest risk for a non-member spouse. Without a proper court order, your court-awarded pension share could vanish overnight.
Risk #1: Payments Stop at Member's Death
By default, your "share" is only a share of payments made during the member's lifetime.
Risk #2: The New Spouse Conflict
Many plans provide a statutory death benefit to an "Eligible Surviving Spouse" (ESS). If the member remarries, this creates a conflict.
Some plan documents even state a new spouse's rights can *reduce* your rightful community property share.
The Legal Shield: Your Right to a Survivor Benefit
Fortunately, California law provides a powerful tool to prevent this loss. A proper court order, known as a Qualified Domestic Relations Order (QDRO), can protect your interest.
"The court shall make whatever orders are necessary or appropriate to ensure that each party receives the party's full community property share in any retirement plan... including an order that a party elect a survivor benefit annuity... for the benefit of the other party." - California Family Code § 2610(a)(2)
This means you can ask the court to order your former spouse to elect a retirement option that provides you with a lifetime income, even after their death.
The Strategy: Lifetime Security vs. Higher Monthly Pay
Securing a survivor benefit involves a trade-off. It costs money, which reduces the monthly payment during the member's lifetime. This cost is borne by you, the Alternate Payee.
Unmodified Option: This provides the highest possible monthly payment, but all payments stop when the member dies. It's a high-risk, high-reward bet on the member's longevity.
Survivor Option: This provides a slightly lower monthly payment. The reduction is the "cost" of insuring the benefit. In exchange, your payments are guaranteed for your entire life, providing long-term security.
A QDRO can use customizable plan options (like SLOCPT's Option 4, CalSTRS's Option 8, or CalPERS's Option 4) to structure this survivor benefit.
Protect Your Future: A 7-Step Checklist
Understand Your Plan: Is it a "separate account" or "shared payment" plan? The rules are completely different.
Don't Accept Default Termination: In a shared plan, don't assume your payments stop at the member's death. You have a legal right to more.
Reject Unfair Language: Scrutinize model QDROs. Contest any language that reduces your share in favor of a future spouse.
Demand a Survivor Benefit: Use Family Code § 2610 to ask the court to order an option that names you as a lifetime beneficiary.
Specify Cost Allocation: Ensure the QDRO clearly states you will bear the actuarial cost of your survivor benefit, and that it only reduces your share.
Get Expert Help: Pension division is highly complex. Work with a knowledgeable family law attorney and a QDRO expert.
Seek Plan Pre-Approval: Always submit draft QDROs to the plan administrator for review *before* getting them signed by a judge.