You may not consider your retirement benefits as assets, but Ohio law does. If you divorce in Ohio, the court can divide your retirement benefits, including benefits you earned under the Public Employees Retirement System (PERS). The judge will award a portion of your PERS benefits to your spouse, even if you are not currently receiving benefits because you have not yet retired.
Divorce in Ohio
In Ohio, you must begin your divorce process by filing a complaint for divorce in your local court, stating the basis for your divorce and your requested terms, including child custody, property division and spousal support. You must then serve this complaint on your spouse to give him an opportunity to respond. If he fails to file an answer to your complaint, the court generally grants the requests in your petition and issues a divorce decree. If he files an answer, disputing something in your complaint, the case is placed on the court docket for a hearing in front of a judge. If you and your spouse disagree about which of you should receive certain property, such as PERS benefits, you may need to hire a lawyer to adequately defend your interests at trial. Ultimately, the judge issues a decision establishing the divorce itself and its terms.
Ohio’s PERS system offers three retirement plans to meet the investment needs of Ohio’s public employees, including a traditional pension plan, member-directed plan and a combined plan. The value of each plan varies depending on the type of plan, amount of contributions and your number of years of service. For example, your contributions are not fully vested under a member-directed plan until you have performed at least five years of service, so if you change to a private job or retire before the five-year point, your PERS account may not have a significant value. On the other hand, if you have worked in a government job for your entire career, PERS benefits can be one of the most valuable things you own.
Ohio law requires an equitable property division in all divorces, though equitable does not necessarily mean equal. Like other retirement benefits, the court considers PERS benefits earned during marriage as marital property under Ohio law. This means your divorce judge has authority to divide the PERS contributions and credits you acquired during your marriage as part of the property division in your divorce. To determine how much your benefits are worth, the court must determine the present dollar value of the future benefit, which may require expert testimony, particularly if you only earned part of your benefits during your marriage. However, unlike private retirement plans, PERS funds do not require a Qualified Domestic Relations Order, a special order from the judge allowing the plan to pay benefits to someone other than the plan’s owner. Instead, PERS benefits can be divided by a standard division of property order issued by an Ohio judge.
Ohio courts can also consider PERS benefits for spousal support, or alimony, purposes, and this could increase or decrease an alimony award depending on the circumstances. For example, if you will receive PERS benefits at retirement but your spouse has no retirement savings, a judge may consider that when deciding whether he should order you to pay spousal support to your spouse. Even if your PERS benefits did not influence the judge’s decision to award alimony, your benefits can be withheld and paid directly to your spouse as part of the judge’s alimony award. If a judge awards spousal support to your spouse and includes a withholding order requiring your employer to withhold the alimony from your paycheck, the alimony amount can be withheld from your PERS payments after you retire.