Retirement benefits can be among the most valuable assets divided in a California divorce. When pension or retirement benefits were earned during marriage, the nonemployee spouse may have a community property interest even though the account or benefit plan is held in the employee spouse’s name.

One procedure that may be used to protect and divide retirement benefits is joinder of the employee benefit plan. Joinder brings the retirement plan into the divorce proceeding as a party for purposes related to the benefits. Whether joinder is necessary or appropriate depends in part on the type of retirement plan involved.

What Does It Mean to Join a Retirement Plan in a California Divorce?

A retirement plan is generally a legal entity separate from the employer.

When an employee benefit plan is joined, it becomes involved in the divorce proceeding so that orders affecting the retirement benefits can be directed to the plan.

California provides a simplified procedure for joining qualifying employee benefit plans. Judicial Council forms are used, and the process can differ from joinder involving other third parties in a divorce.

Correctly identifying the retirement plan is essential. Using only the employer’s name when the actual retirement plan has a different legal name can result in ineffective joinder.

Does Every Retirement Plan Have to Be Joined?

No.

Retirement plans are governed by different state and federal rules, and joinder requirements are not identical for every plan.

Private retirement plans governed by the federal Employee Retirement Income Security Act, commonly called ERISA, do not have to be joined for a California divorce order dividing retirement benefits to bind the plan, provided the order qualifies as a valid Qualified Domestic Relations Order, or QDRO.

Certain federal retirement plans also cannot practically be joined in the same manner as other plans. Federal law may instead establish the procedures that must be followed to divide those benefits.

This makes identifying the specific type of retirement plan an important early step in a California divorce involving retirement assets.

How Can a Spouse Protect a Retirement Interest Before Final Division?

Retirement benefits may require attention before the divorce judgment is complete.

When a plan is not immediately joined, a spouse claiming a community property interest may be able to serve a notice of adverse interest on the plan. This notifies the plan that the nonemployee spouse claims an interest in benefits that may otherwise be paid to the employee spouse.

Depending on the plan and circumstances, additional preliminary orders or a temporary domestic relations order may also be appropriate.

These protective measures can be particularly important if retirement payments, elections, or other events could occur before final property division.

Retirement Benefits Should Be Addressed Early in a California Divorce

Retirement division can involve overlapping California property law, federal benefit law, plan procedures, and specialized court orders.

Waiting until the divorce is nearly finished to identify the plans can create unnecessary complications.

Spouses should identify retirement and pension benefits early, determine the exact names and types of plans involved, and evaluate what procedures are needed to preserve the community property interest. Taking those steps can help ensure that valuable retirement benefits are properly protected and divided as part of the California divorce.