Simplified Guide to Dividing California Public Employees’ Retirement System (CalPERS) Benefits Before Retirement

Here’s a simplified breakdown of how CalPERS benefits can be divided in case of divorce or legal separation. 

The California Public Employees' Retirement System (CalPERS) is a defined benefit plan governed by the Public Employees' Retirement Law. It provides lifetime retirement benefits to public employees, funded by contributions from employees, employers, and investment earnings. 


For members not yet retired, there are two ways to divide CalPERS benefits: 

Model A: Separation of Account Division

How It Works: The ex-spouse (nonmember) is awarded a percentage (up to 50% in most cases) of the retirement benefits earned during the marriage. This share becomes ex-spouse’s separate account. 

When Payments Start: The ex-spouse can access these benefits once both parties are at least age 50 years old, or earlier if the member isn't fully vested (has less than five years of service) or just wants a refund of contributions with interest. If the ex-spouse withdraws a refund of contributions with interest, the member is allowed to redeposit those contributions to increase the member’s monthly benefit. 

Calculation Details: The benefits are based on the ex-spouse's awarded service years, their age at retirement, and the member’s highest average salary earned during any 12-or 36-month period before the date of the divorce judgment or legal separation. The payments include cost-of-living adjustments (COLAs). 

Model B: Shared Interest Division

How It Works: The ex-spouse is awarded a percentage (almost always 50%) of the marital interest for the DBP account. The marital interest is determined by the "Martial Fraction" (also known as the "Time Rule formula"). The Marital Fraction is generally the credits accrued from the date of marriage up to the date of separation over the total credits at retirement.  

When Payments Start: Payments to the ex-spouse begin when the member retires and starts receiving their pension. This includes COLAs and often a survivor benefit, which could reduce the payment amount. The result is the ex-spouse is paid a share of each payment that is paid to the member. 

Special Considerations: If the member retires with a disability, the nonmember’s share is based on the service retirement amount. 

Legal Framework 

Ex-spouses have the right to decide between these models based on California Family Law and specific legal precedents. [CA Family Law Code 2610(a)(3)(B) and In re Marriage of Colvin (1992) 2 Cal.App.4th 1570, 4 Cal.Rptr.2d 690]. This choice should be informed by the circumstances of their divorce and financial needs. 

Separation of Account Division - Consider If: 

  • You seek simplicity and independence in managing retirement benefits. 
  • The member has left their employment and won't return, fixing the salary at the time of departure. 
  • You are near or eligible for retirement (both parties 50 or older), at the time of divorce, and you want to start receiving benefits soon. 
  • The marriage duration contributing to CalPERS is short, and you prefer to manage your funds separately. 
  • If you are in poor health and need to access funds sooner. 

Shared Interest Division - Consider If: 

  • You prefer to wait for the member to retire to potentially receive a larger benefit reflecting salary increases. 
  • You are under age 50 and the member is over age 50 and about to retire so the ex-spouse can start receiving a share of the member’s monthly benefit and not have to wait until the ex-spouse reaches age 50. 
  • If the member passes away and a refund of contributions is available, this model might provide the ex-spouse continuous benefits through a survivor option if the member died married. Or under this method, the ex-spouse could also return to court to modify the ex-spouse’s award to a Separation of Account Division. 
  • If you are in poor health and want your share to revert back to the member. 

QDROCounsel can provide benefit estimates for both methods, crucial for informed decision-making. Consider factors such as employment duration, health conditions, and anticipated retirement plans. For help obtaining a CalPERS estimate and/or to speak with a QDRO Expert regarding the two division methods, contact QDROCounsel at (833) 355-7376.  

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