PENSIONS & DIVORCE
Dividing pension benefits
A marriage dissolution can affect how your TRA pension benefits may be divided in a property settlement.
Public pension plans and the law
This information is designed to give all parties involved in a marriage dissolution a better understanding of how TRA pension benefits may be divided as a property settlement. It includes
- a recommended method for the division of property,
- a summary of the options available to plan participants, and
- a summary of the effect these options have on the division of TRA pension benefits.
Specific questions can be answered by contacting TRA.
Federal Qualified Domestic Relations Order (QDRO) Exemption
The TRA pension plan is exempt from the Qualified Domestic Relations Order (QDRO) provision of the 1984 Retirement Equity Act because the 1974 Employee Retirement Income Security Act (ERISA) relates only to private sector pension plans. Since TRA is a government pension plan, Section 1056 of the 1984 Retirement Equity Act does not apply to TRA. (See 29 U.S.C. §1003, et seq.) QDROs will not be implemented by TRA if they conflict with state law.
State Law Requirements
Minnesota law allows for the division of pension benefit rights if “liquid or readily liquidated marital property” is not sufficient to offset the value of the pension benefits. TRA is not authorized to administer the division of pension benefits for marriage dissolutions dated prior to Aug. 1, 1987.
If the court decides there is not enough liquid marital property to equitably offset the value of the pension benefits, the court may order that future pension benefit payments be divided. In this instance, the marriage dissolution decree should clearly state that there is not enough liquid or readily liquidated marital property for disposition to equitably offset the value of the pension benefits. If liquid or readily liquidated marital property other than property representing vested pension benefits or rights is available, the court, so far as possible, shall divide the property representing vested pension benefits or rights by the disposition of an equivalent amount of the liquid or readily liquidated property.
If a court determines that a portion of the pension benefits of a participant must be assigned to a former spouse, the marriage dissolution decree issued for this purpose must be in compliance with Minnesota Statutes, sections 518.58, 518.581, 518.582, and the provisions of the TRA retirement laws in Chapters 354 and 356. The decree must be filed in a Minnesota district court and a certified copy of the decree must be provided to the TRA plan administrator upon its execution. TRA can accept a certified decree from another state only after it has been filed in a Minnesota district court.
None of the money or benefits provided by TRA are assignable either in law or in equity. (See Minnesota Statutes, section 354.10.) A participant’s account with TRA is not subject to execution, levy, attachment, garnishment or other legal process, except as specifically provided by state laws.
Minnesota Statutes, section 518.58, subdivision 4, describes the division of marital property or rights in the form of future public pension plan payments.
Legal Advice Limitations
TRA staff members do not give legal advice concerning marriage dissolution laws because it is the participant’s own responsibility to seek private legal counsel in this regard. Only a court having proper jurisdiction may provide interpretation of a dissolution decree. The primary responsibility of TRA is to ensure the pension plan does not pay benefits in an amount greater than the amount provided to a participant by the retirement laws if there were no marriage dissolution, and to ensure that the proposed order is in compliance with TRA provisions.
Download our divorce booklet
Our booklet is designed to give all parties involved in a marriage dissolution a better understanding of how TRA pension benefits may be divided as a property settlement: Marriage Dissolution booklet. TRA recommends the attached sample language for division of TRA benefits.