Divorce/Domestic Relations Order
In New Mexico, PERA retirement benefits are generally considered community property subject to division in a divorce. PERA can only administer a division of your retirement benefits if a court orders PERA to pay your former spouse a portion of your retirement benefits directly and the order has been received and approved by PERA’s Office of General Counsel.
A division of PERA benefits is only payable when a member retires or refunds his or her contributions. Your former spouse may only receive a lump-sum payment from your PERA account if you terminate employment with all PERA-affiliated employers and request a refund of your employee contributions and interest. If you remain employed or end your employment and leave your member contributions on account, a lump-sum payment cannot be paid to your former spouse. Instead, when you retire, PERA will administer a court-ordered division of your retirement benefits by issuing a payment to your former spouse each month your pension benefit is payable.
How long your former spouse will receive payments depends on the terms of the court order and which Form of Payment you elect. If you elect Form of Payment A, your former spouse will receive payments during your life. If you elect Form of Payment B or C, your former spouse will generally receive payments over your life and the life of the person you have designated as your survivor beneficiary. If you elect Form of Payment B or C and designate your former spouse as your survivor beneficiary, payments will be made for the lifetime of your former spouse.
The terms of an order dividing PERA retirement benefits may also affect your ability to name a survivor beneficiary when you retire. If an order dividing PERA retirement benefits specifies that you must elect a Form of Payment and a specific survivor beneficiary, you must comply with the terms of the order. If the order does not address electing a specific Form of Payment, you can elect any Form of Payment and designate any survivor beneficiary you choose. PERA cannot change the terms of a court-ordered division of your retirement benefits. It would take another court order signed by a judge to allow any modifications. In addition, certain modifications are barred by New Mexico law after the first pension payment is made.
Finally, you should be aware that you do not need to have an order dividing PERA retirement benefits as a part of your divorce proceeding. Depending on your particular financial situation and the circumstances of your divorce settlement, you may be able to address dividing your retirement benefits in another way. For example, you could divide other property so that you retain sole ownership of your retirement account. An attorney can advise you on options.
This information is a summary of New Mexico statutes and PERA rules and is not intended to provide legal advice or complete information concerning dividing PERA retirement benefits in a divorce.
Attorney Instructions and a Model Order Dividing PERA Retirement Benefits can be found here.