In In re Marriage of Hunt, the Appellate Court of Illinois, First District, devised a formula that is to be used when dividing marital pension plans. 78 Ill. App. 3d 653 (1st Dist. 1979). The formula is known as the Hunt formula and has several variations. The type of Hunt formula that you use when dividing a pension plan can have a drastic effect on the amount of money that you or your spouse will receive. If you use the wrong formula, then you may be paying more or receiving less than you intended. As such, you must carefully consider which Hunt formula to use when dividing a pension plan.
Immediate Offset Hunt Formula
Use this formula when your intention is to allow the participant spouse to retain the entire pension and offset the non-participant spouse’s marital interest in that pension with other marital property. In other words, in exchange for a waiver of interest in the participant spouse’s pension, the non-participant spouse receives a greater share of other marital property. Under this approach, it is necessary to value the participant spouse’s total accrued benefit at the time of the divorce. The following is proposed language to be included in your divorce judgment:
“Pursuant to the Hunt Formula, the marital portion of the Participant’s accrued benefit will be determined by multiplying the Participant’s total accrued benefit, as of the date of entry of Judgment herein, by a fraction, the numerator of which is the number of months of credited service earned during the marriage, and the denominator of which is the total number of months of credited service earned by the Participant as of the date of entry of Judgment herein.”
Deferred Interest Hunt Formula
Use this formula when your intention is to split, between you and your spouse, the marital portion of the monthly benefits that are received from the pension plan. In other words, the parties will split the month payments as they are paid out by the pension plan. Under this approach, no valuation of the participant spouse’s total accrued benefit at the time of the divorce is necessary because neither party will receive a setoff of other marital property. The following is proposed language to be included in your divorce judgment:
“Pursuant to the Hunt Formula, the marital portion of the Participant’s accrued benefit will be determined by multiplying the Participant’s total accrued benefit, as of the date benefits are first paid, by a fraction, the numerator of which is the number of months of credited service earned during the marriage, and the denominator of which is the total number of months of credited service earned by the Participant as of the date benefits are first paid.”
Incorrect Downward Spiral Hunt Formula
The following language is an example of an incorrect downward spiral:
“Pursuant to the Hunt Formula, the marital portion of the Participant’s accrued benefit will be determined by multiplying the Participant’s total accrued benefit, as of the date of entry of Judgment herein, by a fraction, the numerator of which is the number of months of credited service earned during the marriage, and the denominator of which is the total number of months of credited service earned by the Participant as of the date benefits are first paid.”
As you can see from this example, although the participant spouse’s total accrued benefit is valued as of the date of the divorce, the percentage of the total accrued benefit that is deemed marital is calculated by using the date of benefits are first paid. The result of this miscalculation is that the value of the total accrued benefit remains fixed while the percentage of the total accrued benefit that is deemed marital continues to decrease. If your intention is to equally divide the marital portion of a pension plan, this miscalculation is detrimental to the recipient spouse.
Incorrect Upward Spiral Hunt Formula
The following language is an example of an incorrect upward spiral:
“Pursuant to the Hunt Formula, the marital portion of the Participant’s accrued benefit will be determined by multiplying the Participant’s total accrued benefit, as of the date benefits are first paid, by a fraction, the numerator of which is the number of months of credited service earned during the marriage, and the denominator of which is the total number of months of credited service earned by the Participant as of the date of entry of Judgment herein.”
As you can see from this example, although the participant spouse’s total accrued benefit is valued as of the date of the benefits are first paid, the percentage of the total accrued benefit that is deemed marital is calculated by using the date of the divorce. The result of this miscalculation is that the value of the total accrued benefit will continue to increase while the percentage of the total accrued benefit that is deemed marital remains fixed. If your intention is to equally divide the marital portion of a pension plan, this miscalculation is detrimental to the participant spouse.
I was divorced 15 years ago. I am reviewing the documents and wonder if I receive half of his pension? It reads as:
That any and all pension benefits of the husband are hereby divided equally as and for the marital portion pursuant to the HUNT formula and a Qualified Domestic Relations Order is to be entered hereby.
Based on the information you provided, you may, but will not necessarily receive half of your former husband’s total pension benefit. You will, however, receive half of the “marital portion” of his total pension benefit. The Hunt formula is used to determine the amount of the marital portion. Under the Hunt formula, for example, if your former husband worked and paid into his pension for 20 years and you were married to him for 10 of those years, then the marital portion would be 50 percent of his total pension benefit. So, under that situation, if you were to equally divide the 50 percent marital portion, then you would receive 25 percent of his total pension benefit and he would receive 75 percent of his total pension benefit. Hope this helps. Thanks for the comment!
Really great advice! Thanks!