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Domestic Relations Orders and a Member's Retirement Benefit
F. Issues Related to Majauskas-type Formulas
 
1. When a Majauskas-type formula is used to divide a member's benefit, are there any special matters which should be taken into account?

Yes. Taking into account the nature of the teacher’s work year, the System credits service on a nine-month basis, rather than a 12-month basis. Thus, nine months of credited service will result in a full year of service credit in the System. A member, however, may not accrue more than one year of service credit in any plan year (July 1-June 30).

For this reason, where a DRO contemplates with the use of a Majauskas-type formula with a fraction consisting of a numerator equaling the service accrued during the marriage and a denominator equaling the total service accrued in the System, care must be taken to express the numerator and denominator in terms of years, and not months. It can be a potential source of confusion if the numerator and/or denominator are expressed in months, as it may not be clear whether the intended base is 9 months per year or 12 months per year.

2. How is service which is purchased by a member accounted for in a Majauskas-type formula?

New York law has provisions which allow members to purchase credit for public service, such as military service. Where the numerator of the Majauskas fraction is the service credit that has been accrued between two dates (such as the date of the marriage and the date of the commencement of the matrimonial action), the System will only include credit for service which has been rendered between the two dates and, if purchased, has been purchased by the member between those two dates. If the service was rendered outside the two dates or was purchased outside the two dates, it will not be included in the numerator.

3. How is RSSL Article 19 credit accounted for in a Majauskas-type formula?

Article 19 of the Retirement and Social Security Law, effective June 1, 2000, provides Tier 1 and 2 members with a month of service credit for each year of credited service up to a maximum of two additional years. When a DRO requires the alternate payee’s share to be calculated using a Majauskas-type formula with a numerator representing the years of service during the marriage and the denominator representing the member’s total credited service, the additional Article 19 credit will be added to the denominator. If the numerator is not a definite number but is determined by reference to the number of years of the marriage, a prorated portion of the Article 19 service will be added to the numerator. On the other hand, if the DRO already establishes the numerator as a definite number, the System will assume the parties have taken Article 19 credit into account and use the numerator required by the DRO. If the parties wish to have the Article 19 credit accounted for in some other way, the DRO must expressly state how the Article 19 service is to be accounted for.

4. Is all of a member's service used in the denominator of a Majauskas-type formula if the member has more years of credited service than are permitted to be used in the calculation of the member's retirement benefit?

Tier 1 and 2 members are subject to certain limits on the number of years of credited service which may be used to calculate their retirement benefits, as are Tier 3 members when the Tier 3 benefit formula is used. Absent express language in the DRO to the contrary, the System will only include in the denominator of Majauskas-type formula the years of service which have actually been used to calculate the member’s benefit.