For divorcing couples in Colorado, understanding how retirement assets are divided can be a critical aspect of the settlement process. This article provides an in-depth guide to the division of these assets, highlighting Colorado state statutes, applicable federal laws, and relevant case law.

Understanding Retirement Assets in Divorce

Retirement assets can be one of the most significant components of marital property. In Colorado, these assets are subject to equitable distribution, meaning they are divided fairly, though not always equally.

Types of Retirement Assets

  1. Defined Contribution Plans: Includes 401(k)s, 403(b)s, and similar plans. The value is based on contributions and investment performance.
  2. Defined Benefit Plans: Pension plans that promise a specified monthly benefit upon retirement.
  3. IRAs: Individual Retirement Accounts, both traditional and Roth IRAs.

Colorado State Statutes and Equitable Distribution

Under Colorado Revised Statutes § 14-10-113, marital property, including retirement assets accumulated during the marriage, is subject to equitable division. This does not necessarily mean a 50/50 split but a fair distribution based on various factors including the duration of the marriage, each spouse’s economic circumstances, and contributions to the marital property.

Qualified Domestic Relations Order (QDRO)

A Qualified Domestic Relations Order is a legal order that allows for the division of retirement benefits. It recognizes the right of an alternate payee, typically the non-employee spouse, to receive a portion of the retirement benefits.

  1. Federal Law Considerations: Under the Employee Retirement Income Security Act (ERISA), retirement plans must comply with a QDRO.
  2. Drafting a QDRO: The QDRO must specify the amount or percentage of the participant’s benefits to be paid, the duration of payments, and the name of each plan to which the order applies.

Different Ways Retirement Assets Are Divided

  • Immediate Offset: One spouse receives a larger share of non-retirement assets in exchange for the other retaining more retirement assets.
  • Deferred Division: The retirement assets are divided at a future date, often upon retirement or when the participant spouse starts receiving benefits.

Tax Considerations

  • Dividing retirement assets can have significant tax implications.
  • Direct rollovers to an IRA can avoid immediate tax penalties.
  • Understanding tax implications is crucial for both immediate offset and deferred division methods.

Case Law in Colorado

  • Colorado courts have established precedents in how retirement assets are treated in divorces. Key cases include In re Marriage of Hunt, which dealt with the division of military retirement pay.


For couples divorcing in Colorado, the division of retirement assets requires careful consideration and understanding of both state and federal laws. Consulting with financial and legal professionals is crucial in navigating these complex matters.