Defined Benefit Plans: Corporate Pensions in Oregon Divorce Mediation

Although most private employers no longer have pension plans, some companies or industries still do. A pension plan, which provides a monthly income for life, once the employee reaches the requisite retirement age, is known as a defined benefit plan because, as the name suggests, the benefit is defined by a formula.

Pensions can be divided such that the non-employee spouse (often called the Alternate Payee) receives a share of the pension benefit of the employee spouse (often called the Participant). The portion to which the non-employee spouse is entitled often takes into account the number of years that the employee worked for the company and the number of those years that were during the marriage.

The non-employee spouse's share of a pension is typically considered taxable income to the non-employee, just as the employee's share is taxable income to the employee.