This is a presentation where I provided a general overview of Pension Plan Division of Assets in a Divorce to High Net Worth Individuals, specifically Professional Athletes going through a divorce

1. Dealing with Allocation of
Non-Qualified Pension Plan Assets in Divorce
Robert G. Hetsler, Jr.
J.D., CPA, CVA, CFF, CFFA, FCPA , CMAP
WWW.QDRONOW.COM

2. Credentials
• B.S. Accounting – University of North Florida
• Graduate Studies Accounting and Tax – University of
North Florida
• Doctorate Degree in Jurisprudence (J.D.) - Florida Coastal
School of Law
• Certified Public Accountant (CPA)
• Certified Valuation Analyst (CVA)
• Forensic Certified Public Accountant (FCPA)
• Certified in Financial Forensics (CFF)
• Certified Forensic Financial Analyst (CFFA)
• Chartered Merger and Acquisition Professional (CMAP)
• Licensed Florida Real Estate Agent

3. Dealing with Allocation of Non-Qualified
Pension Plan Assets in Divorce
 Florida Law
 §61.075 of the 2014 Florida Statutes sets forth the
requirements for distribution of the marital estate in
Florida
 §61.075(1)(f)
 §61.075(2)
 §61.075(6)(a)1(d)

4. Professional Athlete Retirement Account
Option Summary
 Major League Baseball (MLB)
 National Football League (NFL)
 National Basketball Association (NBA)
 PGA Tour (PGA)
 National Hockey League (NHL)
 Major League Soccer (MLS)
 Women’s National Basketball Association (WNBA)

5. Major League Baseball
 Best pensions in professional sports
 Players qualify for pension benefit after 43 days on
the active roster
 Fully vested after 10 years of service time
 The plan offers 100% joint-survivor benefits
 If player is single, named beneficiary gets
distribution

6. National Football League
 Players are vested after 3 credited seasons
 Benefits range from $3K to $6K per month
 Full benefits offered at 55 years old
 Also eligible for 401(k) and Player Annuity
Program

7. National Basketball Association
 One of the most generous pensions in all of
professional sports
 Vested in pension plan at 3 years of service
 Minimum benefit at 62 is $57K; maximum benefit
is $195K
 Distribution can start at 50 years old
 Also eligible for 401(k)

8. PGA Tour
 Most convoluted pension program of all
professional sports
 No guaranteed benefits
 Rewarded for participating in and playing well in
tour events
 FedEx Cup offers additional retirement benefits

9. National Hockey League
 Eligible for pension after one regular-season game,
but qualify for maximum pension after active for at
least 160 games
 Less than 160 games, qualify for maximum benefit
under Canadian law; more than 160 games, qualify
for maximum benefits under US law
 Fully vested and can begin receiving benefits at 45
years of age
 Early retirement option available at 35 with
reduced benefits

10. Major League Soccer & Women’s National
Basketball Association
 Major League Soccer
 No pension plan
 401(k) program only
 Women’s NBA
 No pension plan
 401(k) program only

11. What are Non-Qualified Plans
 Non-Qualified Plans do not have those same ERISA
requirements and Protections
 Do not have the same benefits or protections as that of
Qualified Plans
 Non Qualified Plans come in all Shapes and Sizes
 Most Common Type of Non-Qualified Plan is Deferred
Compensation Plans
 Other examples of Non-Qualified Plans or Excess Benefit
Plans (EBP), Top-Hat (THP) and Supplemental Executive
Retirement Plans (SERP)

12. Funded vs Unfunded Non-Qualified Plans
 Funded Non-Qualified Plans is a plan where there is some
kind of investment set aside to pay out or “fund” the future
Employee Distributions
 Unfunded Non-Qualified Plans is where there are no
investments set aside to “fund” future distributions
 With Unfunded Non-Qualified Plan the Employee has only
the employers unsecured promise to pay the benefits in the
future.
 There are no guarantees of the continuation or security of
the Plan so if the business goes under or if it is sold.
 Assets of plan have no requirement to be held in trust and
are not protected from employers creditors.

13. Suggested Options for Distribution of Non-
Qualified Plans
 Require the employee spouse to send a portion of each
payment he receives, “if, as and when” he receives it, to the
non-employee spouse
 If non-divisible plan is the only marital asset, consider
increasing alimony payments in lieu of a share of the non-
qualified plan benefits
 When dealing with Survivor Benefits Name the non-
employee spouse as a beneficiary of the retirement plan in
the event of the death of the employee spouse
 Often, simplest solution is to offset value of non-qualified
plan benefits with other marital assets

14. TAXES, TAXES,TAXES
See Revenue Ruling 2002-22
DUE DILIGENCE PRIOR TO
ENTERING INTO SETTLEMENT
AGREEEMENT