Divorce/Pension Question

Discussion in 'UPS Discussions' started by jeepjk09, Jun 4, 2011.

  1. jeepjk09

    jeepjk09 New Member

    My son has worked for UPS for 16 years and has been married 16 years. He's going through a divorce and is being told he has to give the wife 50% of the pension earned up to the date of divorce. Has anyone gone through this? He was also told she would get the money in a lump sum after the divorce because he would have to withdraw it from the fund. Is that even possible? Someone else told us that she would just get a percentage of it when he retires. Anyone have any input on this subject? He works for UPS in Arizona. Thanks
     
  2. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    It sounds as though he may be confusing his pension with his 401k. Yes, she will get half of his 401k as of the date of the divorce but, no, she does not get half of his pension. She is entitled to 2% of his pension for each of the years of their marriage while he was employed at UPS which means she will get 32% of his pension when he retires. I went through a similar situation--my ex got 1/2 of my 401k when the ink was dry on the divorce decree and will get 16% of my pension. The money she receives from the pension will not be in a lump sum.

    The above assumes that she will not be receiving a pension from her job. If this is not the case then the lawyers will work out an equitable settlement in regard to both of their pensions.
     
  3. Monkey Butt

    Monkey Butt You can call me Chappy Staff Member

    It depends on the pension provider and what the state laws are in which the divorce was filed.
    I know people in GA, AL, OH, NC and now NY and they all were a little different.
    He needs to get a lawyer and protect himself.
     
  4. bigmistake

    bigmistake Member

    Boating accident. Try to reconcile, take a trip on a boat and she went over.
     
  5. kingOFchester

    kingOFchester Well-Known Member

    Divorce is ugly. Lawyers are the only winners.

    A friend was going thru a divorce. Hearings were in the city about 45 minutes from his home. After one of the hearings he goes to his friends condo then to a nice resturaunt in the city. Walks in, there is his lawyer and his ex's lawyer having a fine meal. :censored2: him off to know end.....at the point he had already paid his lawyer over 20g's
     
  6. over9five

    over9five Moderator Staff Member

    [-]
    That right there was funny, I don't care who you are!!
    [/-]



    err.... I mean... How inappropriate! You should be ashamed!!
     
  7. jeepjk09

    jeepjk09 New Member

    Thanks for the information. bigmistake - that's funny!

    Do they have a 401K and a pension? Or are you talking about a private 401K - not through UPS.
     
  8. hypocrisy

    hypocrisy Banned

    Upstate is not in the Western Conference of Teamster pension plan, nor in AZ, so his information is not particularly relevant.

    Yes, she is entitled to 50% of the pension for the years worked during which they were married. I'm assuming he is a bargaining unit employee and not management. If so, he is automatically having contributions made to the Western Conference of Teamsters Pension Fund. Arizona, like California and many other States, is a 'Community Property' state. It is not paid in a lump sum but as a portion of benefits after your son retires (so, the longer he delays retirement the longer it takes for her to get her money. The amount will never change, a calculation called a "quadro" is performed to calculate what the amount will be and the check is disbursed without him ever seeing where it goes. Often, this can be offset by any retirement/pension/401k/IRA accounts she has in her name, or used as a bargaining chip to encourage a lump sum payment now. Personally, I would pay out a disproportionate amount from his 401k, if he has one, or quit claim the marital home rather than paying it from the pension. If, for example, your son retires at age 50 and lives to be 85, if she received $1000/mo in pension payments that would be $420,000. The longer he delays retirement, the less she will receive overall. The WCT is the largest and most profitable pension plan in the Country so it represents quite a tempting cherry for his ex. With 16 years in, the $1000/mo is probably a conservative estimate should he make it to his PEER age.)

    If he is in Management, he will also have a pension plan but I am not familiar with the details.

    It's important to note that she is also responsible for half the marital debt.

    She would also be entitled to 50% of the 401k contributions and earnings during the marriage as well as half of any marital assets such as a house, investment property, etc.

    Luckily you are in Arizona and not California, as she would be entitled to lifetime alimony after 10 years of marriage (assuming he is the larger wage earner).

    If is a Teamster, he is entitled to use the legal benefit as is his wife. He should immediately schedule a consultation to prevent her from exercising this option. However, I would not use the Teamster contracted attorney if the divorce is not a simple one, rather, use the Teamster attorney for the initial filing and consent decree, then find a better attorney (expect to pay $5000-$10,000) for the remainder. This is not because the Teamster contracted attorneys are substandard, it's because for what they are paid they are not particularly aggressive. Any issues with kids, property or investments, tax issues, or other kinks should definitely seek aggressive counsel.
     
  9. klein

    klein Für Meno :)

    Crowbar, I totally agree with you, that's how it's done up north, too (50-50%).

    Usually, like you said as a bargaining tool, and most emn simply give the house to their ex spouse to keep their pension for themselves.
    Furniture, and perhaps a new car, too.

    Divorces are rough and tough, esspecially when children are involved, and the soon to be ex-partner had no pension income on her own.
    Basically, everything accumulated in those 16 years would be added up, subtract any debts, and the networth is divided 50/50 (including any pensions earned).
     
  10. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    The 2% for every year of marriage while employed at UPS is a New York law, not a pension rule. We have the option here of either using the Teamster approved lawyer or we receive a set amount from the union if we decide to use our own lawyer to help offset the cost--I think it is $1,000 which, as well all know, will not buy much legal representation. I did not get in to division of assets, child support or other issues as the OP did not ask about any of these.

    50% of the pension for the years worked at UPS during the marriage? Wow.
     
  11. packageguy

    packageguy Well-Known Member

    My friends lawyer said to him, it's cheaper to keep her.
     
  12. brownIEman

    brownIEman Active Member

    Good post Crowbar, good advice.

    Let me add one more thing that many lawyers may not mention but could be a bargaining chip. Spousal support, or alimony. Arizona's laws differ from California's in this regard. If for no other reason than to use as a bargaining chip, you may want to have your son look into whether or not he might be able to get spousal maint. from his soon to be ex. AZ statute is as follows:
    Look at option 3. If your son supported his wife in going to school, he could be due spousal maintenance even if he make the lions share of the money. I have seen this used as a bargaining chip, dropped in exchange for other considerations.
     
  13. PhatAzz

    PhatAzz Active Member

    I think it all depends on the state law where the divorce was granted. My ex got my entire 401K through a"QuaDRO". Not too much money at the time of the divorce. She had to pay include the 401K into her wages for that year and pay taxes on it too. She will not get any portion of my pension when I retire. She already got it with the 401K

    Marriage is Grand Divorce is 50 Grand
     
  14. JonFrum

    JonFrum Member

    Do an Internet search for: Qualified Domestic Relations Order

    That's the document that divides pensions in a divorce.

    Begin with the Department of Labor page . . .
    http://www.dol.gov/ebsa/faqs/faq_qdro.html

    Each state's rules are slightly different, but probably a 50/50 split for the years of marriage.
     
  15. JonFrum

    JonFrum Member

    The Western Conference of Teamsters Pension site explains it all . . .
    https://web.archive.org/web/2013060...an_summary/other_info.html#QualifiedRelations

    It is not necessary for the UPS employee to be retired. All that is necessary for the ex-wife to begin collecting her portion of the pension is that he be eligible for some type of early retirement under Fund rules. She can collect now even if he chooses to go on working.
     
  16. jeepjk09

    jeepjk09 New Member

    Thanks for all the advice. There is a ton of debt and she has a 401K with about $17,000 in it. If they subtract the debt from her pension benefit she will net zero.
     
  17. jeepjk09

    jeepjk09 New Member


    She has a decent job, but he makes about 30% more.
     
  18. Indecisi0n

    Indecisi0n Well-Known Member

    That just seems insane !!
     
  19. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    The debt is marital debt and will be split 50/50 unless the lawyers are able to work out a deal.

    Your son's lawyer will advise him on the best course of action.
     
  20. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    The only people who benefit from divorce are the lawyers.