Dividing LACERA Benefits in a Divorce

The Los Angeles County Employees Retirement Association (LACERA) administers retirement benefits for eligible Los Angeles County employees. When a member divorces or ends a registered domestic partnership, the portion of a LACERA pension earned during the relationship may be community property. A court order must address the parties’ actual dates, service history, elections, and judgment.

California uses community property rules, not equitable distribution. LACERA’s Community Property Guide explains that the relevant period generally runs from the date of marriage or registration of the domestic partnership through the date of separation. The final division depends on the court’s orders and the facts of the case.

LACERA retirement benefits are administered under the County Employees Retirement Law of 1937, beginning at California Government Code section 31450. In a California dissolution that will dispose of LACERA funds or benefits, LACERA states that it must be joined as a claimant under Family Code section 2060.

According to LACERA’s guide, all LACERA retirement plans are defined benefit plans. They provide a lifetime monthly retirement allowance under the member’s applicable plan terms. LACERA is a governmental plan and is exempt from the ERISA provisions that govern Qualified Domestic Relations Orders for private-sector plans. LACERA therefore refers to the plan-specific court order as a Domestic Relations Order (DRO) rather than an ERISA QDRO.

LACERA cannot create a separate account for a nonmember because Los Angeles County has not adopted Government Code section 31685. Payment timing is also different from many private defined contribution plans: LACERA generally cannot pay benefits until the member retires or terminates County employment. The County’s Horizons 457 Plan and 401(k) Savings Plan are separate defined contribution plans administered outside LACERA, so those assets require their own plan-specific review.

The time rule, also called the Brown formula, is commonly used, but it is not required. The parties or court may instead use a specific percentage or dollar amount in the DRO.

Typical Brown formula: (months of LACERA service from the date of marriage or registered domestic partnership to the date of separation ÷ total months of LACERA service at retirement) × 50% × the member’s monthly retirement allowance.

For example, if 120 months of LACERA service fall within the community period and the member has 300 total months of LACERA service at retirement, the community fraction is 40%. Multiplying that fraction by 50% produces a nonmember share of 20% of the member’s monthly retirement allowance. The actual order may use a different allocation, and it should address cost-of-living adjustments when applicable.

1. Notify LACERA and provide the required case documents. LACERA reviews the judgment and related documents to determine whether an additional order is needed. A pending community property claim may place a legal hold on a member’s account.

2. Join LACERA when California procedure requires it. LACERA’s guide states that joinder is required in a California dissolution involving the disposition of LACERA funds or benefits. Joinder alone does not tell LACERA how to divide the pension.

3. Draft a plan-specific DRO. The order must identify LACERA and state a method of division that LACERA can administer under the County Employees Retirement Law, the Public Employees’ Pension Reform Act, and applicable case law.

4. Use LACERA’s proposed-order review. LACERA strongly recommends submitting a proposed DRO to its Legal Office for review and preapproval before filing it with the court. This is a compliance review offered as a courtesy, not legal advice or a court ruling.

5. File the order and submit the conformed copy. After court entry, LACERA needs a complete conformed order with the court filing information and judge’s signature. LACERA’s guide states that an accepted order is implemented within 30 days or when the member retires, depending on benefit status. The guide also warns that LACERA will not issue retroactive payments to a nonmember when the order arrives after the member has retired and begun receiving the monthly allowance.

• Refunds and monthly benefits: The order should address the nonmember’s share if the member takes a refund after terminating employment or later receives a monthly retirement allowance.
• Cost-of-living adjustments: LACERA generally applies COLAs proportionately unless the DRO expressly provides otherwise within the plan’s limits.
• Disability retirement: Disability benefits can involve separate-property and community-property components that depend on retirement eligibility and the court’s order.
• Survivor benefits: A former spouse is not automatically an eligible surviving spouse. If continued lifetime payments are intended, the DRO may need specific retirement-option language that LACERA can administer.
• Taxes: Benefit payments may be taxable to the recipient. Individual tax treatment should be reviewed with a qualified tax professional.

• Community Property Resources
• Community Property Guide: A Reference for Dividing Retirement Benefits in Dissolution Proceedings
• Post-Retirement Divorce (Dissolution)
• Sample Domestic Relations Order

LACERA’s sample language is general guidance and may not fit a particular member’s plan, retirement status, survivor-benefit needs, or court orders. To discuss legal assistance with a California LACERA retirement-division matter, request a free case review.

This page provides general information, not individualized legal, tax, investment, or actuarial advice. It does not create an attorney-client relationship. Laws, procedures, and plan terms can change, and no result is guaranteed.