Alabama State Retirement Plans in Divorce

I just got a call from a client whose spouse has talked to “some lawyer” who assured her (the client’s wife) that she could get a portion of his policeman’s retirement plan by using a QDRO. Let’s get this straight: if you’re discussing divorce in Alabama and you or your spouse has an RSA retirement plan, the kind you get when you’re a teacher, a policeman, or a state employee, that retirement plan will not respond to a Qualified Domestic Relations Order (QDRO). You can draw it up, and you can get the judge to sign it, and you can send it to Montgomery with a nice cover letter on 60# bond, and David Bronner will just laugh at it.

There is simply no way to transfer an RSA retirement plan from one spouse to another in a divorce. So what do you do? Here are three options, all less satisfactory for most divorcing couples:

  • Figure out what the state retirement plan is worth (I use software to do this and can do so quickly), and agree on some other asset (like the house or another retirement plan) that compensates the other spouse for the value of the plan interest
  • Figure out what the state retirement plan is worth and have the spouse who’s keeping it pay the other spouse over time (for example, $100 per month) to compensate for the value
  • Agree for the spouse with the retirement plan to pay a portion of it to the other spouse as he or she receives it
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