Joy Feinberg Answers:
There are different types of pensions divided upon divorce:
- A true pension is a formula-based award – you will be paid a percentage of your last 5 years or compensation and that % is based on the number of years of service with the company and your age at the time of your retirement. Think of this type of retirement plan as something like an annuity.
- Then there are the retirement plans that are most common today = 401(k)s and profit sharing plans where you and your employer put pre-tax money away into an account just for you which will grow (we hope) over time into a very nice nest egg.
- There are government workers plans – such as teachers, police, municipal workers who don’t pay into social security but are instead part of these plans.