Q. How are defined benefit plans divided under California law?
A. In a defined benefit pension plan, the benefit does not depend on the
dollars contributed by employee or employer, but is based on a combination
of factors, including the following [Marriage of Bergman (1985) 168 CA3d 742, 748 n4]:
- Highest income level achieved,
- Years of service at retirement, and
- Age at retirement.
To determine the present value of such a plan, it is necessary that expert
testimony, normally from an
actuary, be presented. This testimony includes the expert's opinion as to present
value, and what economic, health, and other factors the expert considered
in reaching the opinion. [Marriage of Bergman,
The valuation of a participant's interest in a defined benefit retirement
plan is calculated by [Marriage of Stephenson (1984) 162 CA3d 1057, 1083]:
- Determining the value of the pension measured at the future retirement
- Discounting that value back to the present date of valuation.
Family Code section 2610 is the most important statute on pension benefits and rights in dissolution,
but federal law governs many pension rights and obligations.