Different companies have different retirement plans, so it is important to understand the retirement benefits that are available and that have been accumulated during a marriage to determine their proper division in a divorce. The following are two examples of retirement benefits that are available with two of the largest employers in Michigan.
Ford Motor Company
The Ford Motor Company “Savings and Stock Investment Plan” (“SSIP”) is a defined contribution retirement plan that is offered by Ford Motor Company to its employees. According to the plan documents provided by Ford, the SSIP is designed to “provide eligible employees with an opportunity to save for retirement on a tax-favored basis and to receive Company contributions to their accounts.”
The SSIP is a 401(k) plan that allows employees to contribute a portion of their pre-tax salary to their retirement accounts, up to certain annual limits set by the Internal Revenue Service (IRS). In addition to employee contributions, Ford also provides matching contributions to eligible employees based on a formula outlined in the plan documents.
According to the plan documents provided by Ford, the SSIP is subject to regulation by the Securities and Exchange Commission (SEC) and is intended to comply with the Employee Retirement Income Security Act (ERISA) of 1974.
Ford Motor Company also has a “General Retirement Plan” (“GRP”) that is a defined benefit plan which is available to certain employees in the company. The benefits that are payable upon retirement are based on the employee’s job classification, annual income at retirement, and years of service. Employees to not contribute to this plan as the benefits are provided solely by the employer, Ford.It’s important to note that during a divorce, retirement plans, like the Ford SSIP and GSP, may be subject to division as marital assets. The treatment of these plans will depend on various factors, including state law and the specific terms of the divorce settlement agreement. Here are some bullet points to keep in mind:
- Retirement plans that are accumulated during the marriage, like the Ford SSIP and GSP, are considered marital property and subject to division in a divorce.
- The division of retirement plans may require a Qualified Domestic Relations Order (QDRO), which is a court order that allows for the transfer of funds from one spouse’s retirement account to the other.
- The terms of the QDRO will need to be consistent with the terms of the divorce settlement agreement and comply with federal and state laws.
- Depending on the terms of the divorce settlement agreement, one spouse may be entitled to a portion of the other spouse’s retirement benefits, including those from plans like the Ford SSIP and GSP.
- It’s important to work with a qualified divorce attorney and financial professional to ensure that retirement plans are properly valued and divided during the divorce process
Here are some relevant links for further information:
- Ford’s investor relations website: https://shareholder.ford.com/investors/stock-information/stock-plans.html
- Securities and Exchange Commission (SEC) website: https://www.sec.gov/
- Employee Retirement Income Security Act (ERISA) website: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/erisa
It’s important to note that during a divorce, retirement plans, like the Ford SSIP and GSP, may be subject to division as marital assets. The treatment of these plans will depend on various factors, including state law and the specific terms of the divorce settlement agreement. Here are some bullet points to keep in mind:
- Retirement plans that are accumulated during the marriage, like the Ford SSIP and GSP, are considered marital property and subject to division in a divorce.
- The division of retirement plans may require a Qualified Domestic Relations Order (QDRO), which is a court order that allows for the transfer of funds from one spouse’s retirement account to the other.
- The terms of the QDRO will need to be consistent with the terms of the divorce settlement agreement and comply with federal and state laws.
- Depending on the terms of the divorce settlement agreement, one spouse may be entitled to a portion of the other spouse’s retirement benefits, including those from plans like the Ford SSIP and GSP.
- It’s important to work with a qualified divorce attorney and financial professional to ensure that retirement plans are properly valued and divided during the divorce process
General Motors Pension and Retirement Funds | Divorce Distribution
General Motors (GM) offers several retirement plans for its employees, including the General Motors Retirement Program (GMRP) and the General Motors Hourly-Rate Employees Pension Plan (HREPP). Here are some details about each plan:
- General Motors Retirement Program (GMRP)
The GMRP is a defined benefit pension plan that provides retirement income to eligible GM employees. According to GM, the GMRP is designed to “supplement social security and other sources of retirement income.”
Eligible employees earn pension benefits based on their years of service and compensation. The amount of the pension benefit is calculated using a formula outlined in the plan documents provided by GM.
According to GM’s website, the GMRP is a qualified plan under the Employee Retirement Income Security Act (ERISA) of 1974 and is subject to regulation by the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC).
- General Motors Hourly-Rate Employees Pension Plan (HREPP)
The HREPP is a defined benefit pension plan that provides retirement income to eligible hourly-rate GM employees. Similar to the GMRP, the amount of the pension benefit is calculated using a formula based on years of service and compensation.
According to GM’s website, the HREPP is also a qualified plan under ERISA and is subject to regulation by the IRS and the PBGC.
Here are some relevant links for further information:
- GM’s retirement benefits website: https://www.gm.com/corporate/careers/working-at-gm/benefits/retirement.html
- Employee Retirement Income Security Act (ERISA) website: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/erisa
- Internal Revenue Service (IRS) website: https://www.irs.gov/
- Pension Benefit Guaranty Corporation (PBGC) website: https://www.pbgc.gov/
During a divorce, retirement plans like the GMRP and HREPP may be subject to division as marital assets. The treatment of these plans will depend on various factors, including state law and the specific terms of the divorce settlement agreement.
Navigating the complex landscape of retirement plans during a divorce can be overwhelming and confusing.
That’s why it’s essential to work with experienced professionals who can help you understand the legal and financial implications of dividing these assets.
At The Smart Law Group we specialize in divorce-related issues, including the division of retirement plans. We can help you navigate the process, protect your interests, and ensure that you receive a fair and equitable settlement. Don’t go through this alone. Contact us today to schedule an appointment and learn more about how we can assist you during this challenging time.
