Legal Definitions - Retirement Equity Act of 1984

The Retirement Equity Act of 1984 is a federal law that requires private pension plans to follow court-ordered division of a pension between spouses. This law also allows the plan administrator to pay all or part of a worker's pensions and survivor benefits directly to a former spouse if the plan has been served with a court order that meets the federal requirements for a qualified domestic-relations order.

For example, if a couple gets divorced and the court orders that the husband's pension plan should be divided equally between the husband and wife, the Retirement Equity Act of 1984 requires the pension plan to comply with this court order. The plan administrator may also be required to pay a portion of the pension directly to the wife if the court order meets the requirements for a qualified domestic-relations order.

Another example would be if a husband and wife were married for 20 years and the husband worked for a company that had a pension plan. If the couple gets divorced and the court orders that the wife is entitled to a portion of the husband's pension, the Retirement Equity Act of 1984 requires the pension plan to comply with this court order and pay the wife her portion of the pension directly.

These examples illustrate how the Retirement Equity Act of 1984 ensures that spouses are entitled to a portion of their partner's pension in the event of a divorce, and that pension plans must comply with court orders regarding the division of pensions.