How Do You Deal with Non-Vested Pensions in Utah Divorce?

A few months ago, Steve’s wife came to him and said she wasn’t happy and was thinking about ending their marriage.

Steve was, needless to say, surprised.

Since then, Steve and his wife have worked on things and have tried counseling.

Nothing’s worked.

Eventually, Steve’s wife filed for divorce.

One of the issues Steve is trying to figure out is his pension.

He started a job a few years ago, but his pension doesn’t vest for another 3 years.

(Vesting is the idea that you accrue pension benefits as you work, but you have to work at a job for a certain period of time, say 10 years, before you can actually get paid on that pension. In other words, if you work 9 years, you get no benefits. If you work 10 years, full benefits. This is just one example of how pensions vest. Yours may work differently, but the principles I’m going to talk about hold for any vesting pension system.)

Steve’s question is: will my wife get part of my pension even though my pension hasn’t vested?

Let’s work through Steve’s question.

First, both Steve and his wife will receive an interest in a non-vested pension when they divorce.

Even though Steve can’t collect on his non-vested pension yet, he has an ownership interest in it right now. This means his wife will be given a part ownership interest in the divorce.

Second, if Steve works at his job long enough to vest, his wife’s interest in the pension will vest as well, and she’ll be able to collect on her part of Steve’s pension when he retires.

Third, if Steve changes jobs or is laid off before his pension vests, neither he nor his wife will receive payment on his pension.

It may seem odd to tie Steve’s wife’s payment to what Steve does after divorce, but this is the risk you take being married to someone with a conditional pension benefit.

Conclusion

So, the answer to Steve’s question is: his wife will get an interest in part of his non-vested pension, and will receive payments if and when his pension vests.

What I’ve laid out are the general rules governing non-vested pensions in Utah divorce.

Your pension may be different than Steve’s. If so, it may require a slightly different analysis, but the principles will be the same.

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