Texas TRS pensions are commonly seen in Brazos County divorces. If your spouse has a TRS pension and you are in a divorce, don’t be tricked into thinking the account balance on the annual statement is the value of that pension benefit.
The account balance on the front of the TRS Annual Statement of Your Member Account is merely the amount your spouse has contributed to the account plus the amount the state of Texas has contributed to the account plus the interest earned on the account. In contrast, the value of the account (known as the present value) is the amount of money that would need to be invested today so as to have enough to fund the retirement pension payments starting on the retirement date and going through the estimated lifetime of the retired employee.
Calculating that value involves complex mathematics. I will spare you those details. But it is good to know that pension values are calculated using standards from the Actuarial Standards Board, specifically Actuarial Standard of Practice Number 34.
The amount of money it will take to pay out that pension is significantly greater than the account balance shown on the annual statement. The longer the employee has been contributing into the TRS pension plan, the bigger the pension benefit present value will be.
Why should you care? Because the bigger your spouse’s pension value, the more there is to share in the divorce property settlement. This is true for any pension, not just a TRS pension.
If your family property includes a pension, feel free to contact me with your questions. I can also refer you to the best local Brazos County attorney to meet your individual divorce needs.