In California, community property laws serve as the method for defining ownership of property acquired during a marriage or registered domestic partnership. To the extent your LACERA pension was earned during your marriage or registered domestic partnership, it is considered community property and subject to division in a dissolution proceeding.
Your Retirement Allowance
If you divorce after retirement and your ex-spouse was awarded a portion of your pension, LACERA will continue paying your full monthly allowance until we receive a conformed copy (with the court clerk's filing date stamp and the judge's signature) of a Domestic Relations Order (DRO) directing LACERA to divide your pension once your dissolution is final.
However, if LACERA receives a Notice of Adverse Interest pursuant to Family Code Section 755, LACERA will begin withholding the community property portion from your monthly allowance. You will continue receiving your separate property portion of the benefits, and LACERA will hold the community portion until we receive a conformed DRO and the dissolution is final.
LACERA provides the Community Property Guide to assist parties involved in a dissolution. Sample language for court orders is included in the guide and here online.
A member’s retirement allowance is generally not subject to garnishment or other levies except to satisfy a judgment for spousal or child support or a division of community property, or a tax levy by the IRS or the California Franchise Tax Board for payment of delinquent federal or state income tax.
Beneficiary Changes and Death Benefits
The option you selected at retirement may restrict beneficiary eligibility for a continuing allowance and changes to your primary beneficiary designation after divorce as follows.
- Beneficiary Changes
Unmodified, Unmodified Plus, or Option 1 - You may designate a new primary beneficiary. However, continuing benefits under the Unmodified or Unmodified Plus options can only be paid to an eligible surviving spouse, domestic partner, or in the absence of a surviving spouse or partner, eligible minor child(ren).
- Option 2, 3, or 4
- You may not change your beneficiary. If you named your ex-spouse as a beneficiary at retirement, he or she will receive a monthly continuing allowance after your death.
- You may change your beneficiary designation for the $5,000 lump-sum death benefit at any time after retirement.
- Death Benefits
Unmodified or Unmodified Plus Options - An ex-spouse is not considered to be an eligible surviving spouse and therefore is not eligible to receive a monthly continuing allowance under the Unmodified or Unmodified Plus retirement option, even if he or she is named as beneficiary after the divorce.
- Upon your death, LACERA will pay any remaining portion of your accumulated contributions in one lump-sum payment to the beneficiary you designated after your divorce or to your estate. Neither your new beneficiary nor your estate is eligible for a continuing benefit.
- An ex-spouse may be eligible to receive a community property portion of a lump-sum benefit, or a proportionate share of the eligible surviving spouse’s benefit, if applicable.
- Option 1
- If you name your ex-spouse as beneficiary, he or she receives the balance of your undistributed contributions in a lump sum.
- Option 2, 3, or 4
- If you named your ex-spouse as a beneficiary at retirement under Option 2, 3, or 4, he or she will receive a monthly continuing benefit after your death.
See the Retirement Options section for video overviews and detailed information about the six different options.
Eligibility for Survivor Healthcare
Divorce impacts more than a retiree’s retirement allowance; it also affects eligibility for LACERA-administered survivor healthcare.
If you named your former spouse or domestic partner as beneficiary at the time of retirement, and you later divorce or terminate your domestic partnership, your ex will not be eligible for LACERA-administered survivor healthcare upon your death.
To enroll in LACERA-administered healthcare coverage, your survivor or beneficiary must be receiving a continuing monthly allowance from LACERA and qualify as an eligible survivor.
For additional information, contact our Retiree Healthcare Division at 800-786-6464 (press 1).