Understanding SBCERA Benefits After Divorce
When a couple divorces in San Bernardino County, California, and one spouse is a member of the San Bernardino County Employees’ Retirement Association (SBCERA), the division of retirement benefits becomes a crucial aspect of the proceedings. California’s community property laws dictate that retirement benefits accrued during the marriage are considered community property and are subject to division upon dissolution of marriage. To effectuate this division, a specific court order known as a Domestic Relations Order (DRO) is required.
What is a DRO?
A Domestic Relations Order (DRO) is a legal document issued by a court that instructs SBCERA on how to allocate a member’s retirement benefits between the member and their former spouse, referred to as the “alternate payee.” The DRO must explicitly detail the alternate payee’s entitlement to a portion of the retirement benefits. It’s important to note that a Judgment of Dissolution of Marriage or Property Settlement Agreement alone is insufficient to divide SBCERA benefits; a separate DRO is necessary
Notifying SBCERA Regarding a Divorce
Upon filing for divorce or receiving a final judgment, it is imperative for SBCERA members to promptly notify SBCERA. Failure to do so can result in significant delays in the payment of current or future retirement benefits. Members should submit a complete copy of the Judgment of Dissolution of Marriage or Property Settlement Agreement, including all attachments, to SBCERA for review. This documentation must bear the court’s file stamp and the judge’s signature
Filing a Joinder
In cases where the court awards an interest in the community property portion of the retirement benefit to the former spouse, SBCERA must be joined as a third party to the divorce proceedings. This process, known as filing a Joinder, is mandatory and ensures that SBCERA recognizes and implements the court’s orders regarding the division of retirement benefits. Without a Joinder, distribution of retirement benefits may be delayed until the Joinder is filed and served on SBCERA
Obtaining a Domestic Relations Order (DRO)
After filing a Joinder, the next step is to obtain a Domestic Relations Order (DRO). SBCERA provides sample DROs to assist in drafting an acceptable order, which can be found in their Dissolution of Marriage Guidelines. The DRO must clearly outline how and when SBCERA is to distribute the retirement benefits to the member and the former spouse. Before relying on a model order, parties should be advised that there is a lot at stake in a pension, and that small mistake due to the use of a model order could have drastic impacts on future pension benefits, especially if the model order does not provide for survivor benefits , or the wrong information is filled into the order – QDROs and DROs are not fill-in-the-blank Mad Libs.
Division Options for SBCERA Pensions
The division of SBCERA pensions typically follows the “time rule” formula, a common method in California for dividing retirement benefits. This formula calculates the community property interest by dividing the number of years the member was married and contributing to SBCERA by the total years of service credit at retirement. The resulting percentage represents the community property portion, which is then divided equally between the member and the former spouse
Example of the Time Rule Formula:
If a member has 30 years of total service credit at retirement, and 18 of those years were accrued during the marriage, the marital portion of the pension would be 60% (18 years ÷ 30 years = 0.60). Each party would then receive 30% of the pension benefit (60% × 50% = 30%).
Survivor Benefits and DROs
SBCERA offers various retirement options that provide continuing benefits to a beneficiary after the member’s death. A DRO can require the member to select a specific option and designate the former spouse as the beneficiary, ensuring that the alternate payee continues to receive a portion of the retirement benefit after the member’s death. The DRO must clearly state the chosen option
Must the DRO be Finalized Before Retirement?
While a DRO does not need to be finalized before a member retires, it’s highly advisable to have it in place before the retirement benefit is finalized. This ensures that the division of benefits is clearly defined and can prevent potential delays or disputes. If SBCERA receives a valid draft DRO before finalization, they will hold the retirement benefit processing until the court-ordered DRO is received
Get Started!
Dividing an SBCERA pension in a divorce is a complex process that requires careful planning and attention to detail. A properly drafted DRO is essential to ensure a fair and equitable division of this valuable marital asset. Understanding the different division options, survivor benefits, and other key provisions is crucial to protect your financial future. While many people think that they should wait until they are near retirement to deal with outstanding QDRO and DRO issues, waiting could mean a complete loss of benefits if someone passes away or funds are transferred out of the retirement account.
Set Up a Free Consultation Today
If you are facing a divorce and need assistance with dividing your SBCERA benefits, contact us at Peacock QDROs to schedule a consultation. Our experienced attorneys can guide you through the process, draft a comprehensive DRO, and ensure your interests are protected. Visit PeacockEsq.com or call (929) 437-3767 to learn more.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Laws and regulations may change, and individual cases vary. Consult an attorney for legal guidance specific to your situation.
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Attorneys & Staff
William "willie" peacock, Esq.
Willie is an attorney licensed to practice in California since 2011. He has since added admissions in Missouri, New York, New Jersey, Iowa, Kansas, Connecticut, and North Dakota.
He was born and raised in Missouri, went to high school and college in California, and returned there after attending the prestigious Washington and Lee University, School of Law in Lexington, Virginia. He relocated to New York and relaunched his law firm in 2018, focusing exclusively on retirement—estate planning and division of retirement accounts through qualified domestic relations orders (QDROs).
He has written for Thomson Reuters, Clio, and California Lawyer, and his writings have been cited by the American Bar Association, Above the Law, and other leading legal publications.
He is currently rated a perfect 10.0 by Avvo.com, and more importantly, has a perfect 5-star rating from his past clients on all major review sites.
