Pension Credits "Bought Back" Are Marital Assets
New York State employees can sometimes purchase "service credits" for periods of prior state employment. These credits enhance the pension benefits the employee receives upon retirement. In this Second Department case, the police officer Husband purchased credits for prior part-time work as a janitor. While the part-time janitor work was performed prior to the date of marriage, the credits were bought back during the marriage with marital funds. For that reason, the Appellate Division upheld the lower court ruling that the purchased service credits were marital propeerty. However, because the Husband began his police career fifteen months prior to the start of the marriage, the portion of his retirement benefits earned during that time were his separate property and could not be distributed by the Court. See Burke v. Burke, 2019 NY Slip Op 06060.
Pensions can often be one of the most valuable assets in a marriage. If you are getting divorced and you or your spouse have employer-provided pensions, you should contact an attorney to ensure that the pension benefits are handled properly.