G.S. 50-20.1

§ 50-20.1. Pension, retirement, and deferred compensation benefits.

(a) The distribution of vested marital pension, retirement, or deferred compensation benefits may be made payable by any of the following means:

(1) As a lump sum from the plan, program, system, or fund for those benefits subject to subsection (d1) of this section.

(2) Over a period of time in fixed amounts from the plan, program, system, or fund for those benefits subject to subsection (d1) of this section.

(3) As a prorated portion of the benefits made to the designated recipient, if permitted by the plan, program, system, or fund (i) at the time the participant-spouse is eligible to receive the benefits, (ii) at the time the participant-spouse actually begins to receive the benefits, or (iii) at the participant-spouse's earliest retirement age. For purposes of this section, "participant-spouse" means the spouse who is a participant in the plan, program, system, or fund.

(4) By awarding a larger portion of other assets to the party not receiving the benefits and a smaller share of other assets to the party entitled to receive the benefits.

(5) As a lump sum, or over a period of time in fixed amounts, by agreement.

(b) The distribution of nonvested marital pension, retirement, or deferred compensation benefits may be made payable by any of the following means:

(1) As a lump sum by agreement.

(2) Over a period of time in fixed amounts by agreement.

(c) Notwithstanding the provisions of subsections (a) and (b) of this section, the court shall not require the administrator of the plan, program, system, or fund involved to make any payments or distributions to the nonparticipant spouse, except as permitted by the terms of the plan, program, system, or fund.

(d) When the amount of the benefit payable by the plan, program, system, or fund to the participant-spouse is determined in whole or part by the length of time of the participant-spouse's employment, the marital portion shall be determined using the proportion of time the marriage existed (up to the date of separation of the parties) simultaneously with the total time of the employment which earned the benefit subject to equitable distribution, to the total amount of time of employment that earned the benefit subject to equitable distribution. The determination shall be based on the vested and nonvested accrued benefit, as provided by the plan, program, system, or fund, calculated as of the date of separation, and shall not include contributions, years of service, or compensation which may accrue after the date of separation. The award shall include gains and losses on the prorated portion of the benefit vested at the date of separation and cost-of-living adjustments and similar enhancements to the participant's benefit. Notwithstanding any other provision of this Chapter, if the court makes the award payable pursuant to subdivision (a)(3) or (b)(3) of this section and the court divides the marital portion of the benefit equally between the participant-spouse and nonparticipant spouse, the court shall not be required to determine the total value of the marital benefits before classifying and distributing the benefits. However, neither party shall be prohibited from presenting evidence of the total value of any marital benefits or of any benefits that are separate property of either spouse. When a pension, retirement, or deferred compensation plan, program, system, or fund, or an applicable statute limits or restricts the amount of the benefit subject to equitable distribution by a State court, the award shall be determined using the proportion of time the marriage existed (up to the date of separation of the parties) simultaneously with the total time of the employment which earned the benefit subject to equitable distribution to the total time of employment, as limited or restricted by the plan, program, system, fund, or statute that earned the benefit subject to equitable distribution.

(d1) When the amount of the benefit payable by the plan, program, system, or fund is not determined in whole or part by the length of time of the participant-spouse's employment, but is instead based on contributions and held in one or more accounts with readily determinable balances, including, but not limited to, individual retirement accounts and defined contribution plans, such as those within the definitions of Internal Revenue Code section 401(k), 403(b), 408, 408A, or 457, the court shall not determine the award using the fraction described in subsection (d) of this section. The court instead shall determine the marital portion of the benefit by determining the amount of the account balance that is due to contributions made or earned during the marriage and before separation, together with the income, gains, losses, appreciation, and depreciation accrued on those contributions. If sufficient evidence is not presented to the court to allow the court to make this determination, the court shall then determine the marital portion of the benefit by using the fraction described in subsection (d) of this section, namely, by using the proportion of time the marriage existed (up to the date of separation of the parties) simultaneously with the employment which earned the benefit subject to equitable distribution to the total amount of time of employment. In either event, the award shall be based on the vested and nonvested accrued benefit as of the date of separation, together with the income, gains, losses, appreciation, and depreciation accrued after the date of separation on the date-of-separation benefits. However, the award shall not include contributions that may accrue or be made after the date of separation, or any income, gains, losses, appreciation, and depreciation accrued on those contributions.

(e) No award shall exceed fifty percent (50%) of the benefits the person against whom the award is made is entitled to receive as vested and nonvested pension, retirement, or deferred compensation benefits, except that an award may exceed fifty percent (50%) if (i) other assets subject to equitable distribution are insufficient; or (ii) there is difficulty in distributing any asset or any interest in a business, corporation, or profession; or (iii) it is economically desirable for one party to retain an asset or interest that is intact and free from any claim or interference by the other party; or (iv) more than one pension or retirement system or deferred compensation plan, program, system, or fund is involved, but the benefits award may not exceed fifty percent (50%) of the total benefits of all the plans added together; or (v) both parties consent. In no event shall an award exceed fifty percent (50%) if a plan, program, system, or fund prohibits an award in excess of fifty percent (50%).

(f) In the event the person receiving the award dies, the unpaid balance, if any, of the award shall pass to the beneficiaries of the recipient by will, if any, or by intestate succession, or by beneficiary designation with the plan, program, system, or fund consistent with the terms of the plan, program, system, or fund unless the plan, program, system, or fund prohibits such designation. In the event the person against whom the award is made dies, the award to the recipient shall remain payable to the extent permitted by the pension or retirement system or deferred compensation plan, program, system, or fund involved.

(f1) Whenever the award is made payable pursuant to subdivision (a)(3) or (b)(3) of this section, and the pension or retirement or deferred compensation plan, program, system, or fund permits the use of a "separate interest" approach in the order, there shall be a presumption, rebuttable by the greater weight of the evidence, that the "separate interest" approach shall be used to divide the benefit in question. For purposes of this section, the phrase "separate interest" approach means any method of dividing pension or retirement system or deferred compensation benefits in which the nonparticipant spouse, the spouse not a participant in the plan, program, system, or fund in question, receives an interest that allows the nonparticipant spouse to receive benefits in a manner independent, in whole or part, of the benefits received by the participant-spouse, or to make elections concerning the receipt of benefits independently of the elections made by the participant-spouse.

(f2) Whenever the pension or retirement or deferred compensation benefit is distributed pursuant to subdivision (a)(3) or (b)(3) of this section in an order that does not employ the "separate interest" approach, the court may, considering the length of the marriage and the ages of the parties, (i) award all or a portion of a survivor annuity to the nonparticipant spouse or former spouse and (ii) allocate the cost of providing the survivor annuity between the parties. The survivor annuity awarded by the court, if any, shall be allocated in accordance with the terms of the retirement plan, program, system, or fund.

(f3) Whenever the pension or retirement or deferred compensation plan, program, system, or fund does not automatically provide pre-retirement survivor annuity protection for the nonparticipant spouse, the court shall order pre-retirement survivor annuity protection for the nonparticipant spouse if permitted by the plan, program, system, or fund.

(f4) The court may allocate equally between the parties any fees assessed by a plan, program, system, or fund in order to process any domestic relations order or qualified domestic relations order.

(g) The court may require distribution of the award by means of a qualified domestic relations order, or as defined in section 414(p) of the Internal Revenue Code of 1986, or by domestic relations order or other appropriate order. To facilitate the calculating and payment of distributive awards, the administrator of the plan, program, system, or fund may be ordered to certify the total contributions, years of service, and pension, retirement, or other deferred compensation benefits payable.

(h) This section and G.S. 50-21 shall apply to all vested and nonvested pension, retirement, and deferred compensation plans, programs, systems, or funds, including, but not limited to, uniformed services retirement programs, federal government plans, State government plans, local government plans, Railroad Retirement Act pensions, executive benefit plans, church plans, charitable organization plans, individual retirement accounts within the definitions of Internal Revenue Code sections 408 and 408A, and accounts within the definitions of Internal Revenue Code section 401(k), 403(b), or 457.

(i) If a plan, program, system, or fund deems unacceptable an order providing for a distribution of pension, retirement, or deferred compensation benefits, then the court may upon motion of a party enter a subsequent order clarifying or correcting its prior order, as may be necessary to comply with the specific technical requirements of the plan, program, system, or fund.

(j) Notwithstanding any other provision of this Chapter, a claim may be filed, either as a separate civil action or as a motion in the cause in an action brought pursuant to this Chapter, for an order effectuating the distribution of pension, retirement, or deferred compensation benefits provided for in a valid written agreement, as defined in G.S. 50-20(d), whether or not a claim for equitable distribution has been filed or adjudicated. The court may enter an order effectuating the distribution provided for in the valid written agreement. (1997-212, s. 1; 2019-172, s. 1.)