Defined benefit retirement plans present a challenging property division issue in many marital actions. A defined benefit plan is one in which the benefits may be ascertained by reference to factors such as the employee’s age at retirement, years of service at retirement and highest income level achieved. Marriage of Bergman (1985) 168 CA3d 742.
In martial actions, defined benefit plans may be divided by either (1) a present in-kind division or (2) the asset distribution method or “cash out”. The court has broad discretion in determining which approach to use, and neither method is judicially preferred. The court must, however, actually exercise its discretion to choose a method that is fair and equitable under the parties’ circumstances to effect an equal division of community interest in the benefits.
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