Untangling Retirement Accounts with Ties to PA and NJ

For many couples, retirement accounts are among the most valuable assets they own. Things get even more complex when one or both spouses have worked in both Pennsylvania and New Jersey, leaving them with multiple pensions, 401(k)s, or benefit plans governed by different state laws and employer systems.

A Bucks County family attorney can guide you through the process of dividing property when a marriage comes to an end. Understanding how dual-state retirement assets are divided is essential for achieving a fair and complete divorce settlement.

Different States, Different Rules

While Pennsylvania and New Jersey share a border, their family law systems are distinct. Both states follow equitable distribution, meaning marital property is divided fairly, but not necessarily equally. However, each state defines and values marital assets in its own way.

If you live in Bucks County but your spouse worked for a New Jersey employer, you could be dealing with two sets of rules governing how a retirement account is managed, vested, or distributed. For example:

• Public employee pensions in New Jersey, such as those from the New Jersey Public Employees’ Retirement System (PERS) or Teachers’ Pension and Annuity Fund (TPAF), have specific division procedures and may require a Qualified Domestic Relations Order (QDRO) tailored to that system.
• Pennsylvania state pensions or local government plans follow their own administrative rules, and some may not allow division until the employee actually retires.
• Private 401(k) or IRA accounts are generally divided under federal guidelines, but state-specific factors can still affect how funds are treated.

A key step is determining how much of each retirement account counts as marital property. Typically, any portion of the retirement benefit earned during the marriage is subject to division, while contributions made before the marriage, or after the separation date, remain separate.

When a spouse worked in New Jersey before marriage but continued contributing to the same plan while living in Pennsylvania, the division becomes more complex. Financial experts or actuaries may be needed to trace the marital portion across state lines and ensure the split is equitable.

Using a QDRO or Domestic Relations Order

Dividing retirement accounts requires precision. A QDRO is a court order used to divide employer-sponsored retirement plans without triggering taxes or penalties. Each plan administrator has unique rules about what language must be included, when the order can take effect, and how benefits will be paid out. Having the right legal guidance ensures no mistakes are made that could delay or reduce your future benefits.

It’s important to connect with a Bucks County family attorney who understands both Pennsylvania and New Jersey law. Doing so can help you identify every retirement asset, calculate its marital value, and draft the necessary legal orders to secure your share.

Are you dealing with a Pennsylvania school pension, a New Jersey public employee plan, and private retirement accounts? You deserve a fair outcome that protects your financial future for the years ahead. Speak with the attorneys at Kevin L. Hand, P.C. Call 215-515-2604 to schedule a confidential consultation.