California public employees may be surprised to find out that options are very limited when it comes to changing a beneficiary for a CALPers pension. One such fireman from Alameda County recently found out the hard way.
After getting married a year and a half before his retirement, he then retired and filed for divorce 11 years later. During divorce proceedings, he was surprised to learn that though his ex-wife would be entitled to less than one percent of his retirement, he would not be allowed to remove her as the beneficiary. In addition, should he become deceased before her, she would receive a much larger portion.
The length of a marriage is the determining factor in the portion of a CALpers, as well as most other public employee pension plans, which a spouse will receive after divorce. If the public employee wishes to change a beneficiary prior to retirement, he or she may do so. In addition, the named beneficiary may name a beneficiary for their portion.
Pension plan disbursements after divorce can become complex matters. One basis of logic behind such rules are that an elderly retiree could marry a younger individual, who would then inherit years of pension payments. With gray divorces on the rise, the inability to remove a beneficiary could also become an issue. Most plans will allow this rule to be overridden with a court order. If you are navigating a divorce in which a pension plan exists, consult with an experienced divorce attorney for advice on how to make sure you do not unnecessarily lose your retirement.