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You can always calculate the value of a defined contribution plan by simply looking at the total account balance line on a plan statement. Typically, employees receive annual statements that show the current year’s contributions and investment earnings and the end-of-year total account balance. The contributions to an employee’s account under a defined contribution plan generally come from one of two sources. The first source is generally from the employee’s own paycheck. In other words, your ex-husband may have elected to contribute a portion of his weekly paycheck to the plan. Usually, this is done on a pre-tax basis, which means that his contributions (the portion taken out of his paycheck) were distributed directly into his retirement plan account before being taxed by Uncle Sam. The second source of contributions to a defined contribution plan comes from the employer itself. Your ex-husband’s employer may make matching or voluntary contributions over and above those contributed by your ex-husband. The contributions in the retirement plan are then generally invested in one or more available mutual fund alternatives (or in company stock, if applicable). Typically, employees can spread their contributions in any way they choose from among several investment alternatives, ranging from low-risk money market accounts to high-risk and more volatile types of funds.

At any time, the value of your ex-husband’s defined contribution plan is merely reflected by the total account balance as of that date. For example, if you divorced on July 1, 1999, you should be entitled to half of the total account balance under your ex-husband’s defined contribution plan that accumulated during the marriage until July 1, 1999. You, or your attorney, could obtain a financial statement from the plan administrator that shows the total account balance on that date. Assuming that your ex-husband did not participate in the plan before your marriage, you would simply be entitled to one-half of the total account balance on July 1, 1999. This “what you see is what you get” type of plan is fairly easy to incorporate into the marital estate during a divorce or dissolution proceeding. A professional pension evaluator is not needed for these types of plans. Again, a participant’s benefits under a defined contribution plan are based solely on the amounts contributed to his accounts, plus any income, expenses, gains, and losses that may be allocated to his accounts. When participants retire or terminate their participation under a defined contribution plan, they can usually elect to receive their benefits in the form of a single lump sum distribution, payable immediately.