This has been an extremely tough year for teachers. At McConnell Family Law, we thank you for your hard work and dedication every day and, especially, in this time of Covid. As with first responders, nurses, and military veterans, we offer a 10% discount to any full-time classroom teacher. It isn’t enough, but it is our way of saying thank you!
If you are a teacher facing divorce, it is important to know that the financial issues can be uniquely complex. The financial aspects of any divorce are often difficult. For teachers, asset division is complicated by a particular qualifier—teachers do not contribute to Social Security. As such, their retirement funds are unique to their profession, and the division of retirement assets in a “teacher divorce” can be hard to understand.
Will your former spouse have a portion of your pension? What are your rights regarding your spouse’s Social Security? If your spouse also has a pension, how do you determine the equitable division of your respective pensions?
Connecticut is an “equitable division” state regarding divorce, as opposed to a “community property” state. Connecticut uses an equitable system for the division of marital property, meaning it will be fair but not necessarily equal. Many factors come into play in the court’s determination of what is “fair and equitable.”
What is the retirement benefits system for teachers in Connecticut?
In the 1950s, public school teachers chose not to join the Social Security program. Instead, the state provides benefits through the Teacher’s Retirement System (TRS). All public school teachers working in Connecticut are automatically enrolled in this program.
What are the two facets of the TRS?
- The Defined Benefit Plan: Teacher retiree benefits are calculated by a formula that factors in age, service, and the average of their three highest-paid salaries.
- The Defined Contribution Plan: Teachers can contribute a portion of their salaries into a lump-sum fund that becomes available upon retirement. The benefits available to all the teachers in the state depends on the amount accumulated in this fund.
To receive maximum monthly benefits, teachers must meet the following qualifications for retirement:
- Retire at age 60 with 20 years of experience
- Retire at any age with 30 years of experience
What happens to my retirement benefits if I get divorced?
In Connecticut, all of the property, assets, and income in the “marital estate” are considered in determining a fair and equitable division between the spouses. This is often referred to as creating a “mosaic.” There are multiple pieces that comprise the marital estate. Every case is unique to the particular parties involved in that case. Some people may choose to balance a retirement account against the equity in a marital home. Some people may choose to go 50-50 on each asset. If there is an alimony component to a case, some parties may want to “buy out” the alimony claim with other assets or accounts. The division just needs to be fair and equitable to both parties.
Teachers need to be extremely careful regarding any division of their pensions. This is especially true if a teacher’s spouse is eligible for Social Security. Unlike cases where both spouses are eligible for Social Security, in a teacher divorce, it is unlikely that the teacher will be eligible for any portion of the spouse’s Social Security. This is due to the offset of a teacher’s pension against any potential Social Security spousal benefits. Since teachers do not pay into Social Security, they cannot collect both their pension and Social Security benefits on their spouse’s earnings. Further, depending upon a couple’s circumstances, a teacher’s spouse may be eligible to receive a portion of the teacher’s pension. This will depend upon many factors which need to be evaluated on a case-by-case basis. The important thing to know is that teachers face a unique situation in a divorce regarding retirement assets and it is critical to have counsel that is knowledgeable and experienced in teacher divorces.
There are required “mechanics” to dividing a teacher pension. If a teacher pension is divided, the court may order that a Domestic Relations Order be drafted and submitted for approval to the Teacher’s Retirement Board. The Domestic Relations Order is typically prepared by an experienced DRO attorney. It is extremely important that a teacher’s divorce counsel follow through and make sure the DRO is fully processed. It is crucial to understand that a teacher’s spouse cannot and will not receive benefits before the teacher. The teacher must first retire and apply for TRS benefits in Connecticut before any benefits will begin to be paid. If a teacher was married for just a portion of his or her teaching career, the percentage eligible to the former spouse would be proportionate to the length of the marriage.
If this all sounds complicated, it is. If you have knowledgeable and experienced counsel regarding teacher divorce, it will still be complicated; but good counsel will make sure that you understand every aspect of your case, including the division of teacher retirement.
This has been an extremely difficult time for many families. At Connecticut Family Law Group, we strive to help each family in “Finding Peace Through Strength.” Take the first step now and contact us at (203) 541-5520. Or visit us at www.mcconnellfamilylaw.com.