Pension Division in a New Hampshire Divorce: LeGault, Hodgins, and NHRS Rules

Defined benefit pensions — the kind that pay a fixed monthly amount in retirement — are among the most complex assets to divide in a New Hampshire divorce. Unlike a 401(k) with a clear account balance, a pension's value depends on future variables: years of service, final salary, and the retiree's lifespan.

In May 2025, the New Hampshire Supreme Court fundamentally changed how pensions are treated in divorce. If you or your spouse has a pension, you need to understand the old rules, the new rules, and the specific requirements of the New Hampshire Retirement System.

What the LeGault Decision Changed

For 40 years, New Hampshire divorce attorneys routinely applied the formula from the 1985 case Hodgins v. Hodgins to automatically exclude any pension benefits accrued before the marriage. If a teacher had 10 years of service before marriage and 15 after, only the 15 post-marriage years were considered marital property.

On May 29, 2025, the Supreme Court issued In the Matter of LeGault & LeGault and ruled that this automatic exclusion directly conflicted with the all-property language of RSA 458:16-a. The court's reasoning was straightforward: the statute says all property is subject to division, and routinely carving out premarital pension accruals contradicts that plain language.

Now, premarital pension benefits must be included in the total marital estate. A trial court can still award the premarital portion to the employee-spouse, but it must do so as an active, written decision within the overall equitable distribution — not as an automatic exemption.

The practical impact: the non-employee spouse can now seek financial offsets. If the employee-spouse retains the premarital portion of their pension, the other spouse may argue for a larger share of the family home, cash accounts, or other assets to compensate.

The Hodgins Coverture Fraction

The Hodgins formula remains the standard method for calculating the marital portion of a pension. It produces a fraction:

Coverture Fraction = Months of Marriage During Creditable Service ÷ Total Months of Creditable Service at Retirement × Awarded Percentage (typically 50%)

Example: A firefighter has 25 years (300 months) of total service. The marriage overlapped with 15 years (180 months) of that service. The non-employee spouse is awarded 50% of the marital portion.

Coverture Fraction = (180 ÷ 300) × 50% = 30%

The non-employee spouse receives 30% of each monthly pension payment once the employee retires and begins collecting.

After LeGault, the denominator still uses total months of service, but the exclusion of premarital months from the numerator is no longer automatic. The court must evaluate the premarital portion within the full equitable distribution framework.

New Hampshire Retirement System (NHRS) Specific Rules

If the pension is through NHRS — covering teachers, police, firefighters, and other state and municipal employees — additional rules apply that don't exist for private-sector pensions:

NHRS requires its own QDRO. A standard divorce decree or settlement agreement will not divide an NHRS pension. You must submit a formal, court-approved QDRO that the NHRS legal team reviews and "qualifies."

Use their templates. NHRS strongly recommends using its official pre-retirement or post-retirement QDRO templates. Custom-drafted orders that attempt to award benefits not permissible under the state plan will be rejected.

No separate accounts. Unlike private 401(k) plans, NHRS cannot segregate the non-employee spouse's share into a separate account. There's no lump-sum transfer option.

Payment triggers. The alternate payee (non-employee spouse) cannot collect any benefits until the member actually retires and begins receiving monthly payments, or elects to take a full refund of accumulated contributions upon leaving employment.

Death reversion. If the alternate payee dies before the member, their allocated share immediately reverts to the NHRS member. The alternate payee cannot designate their own beneficiary for the pension share.

Private Sector Pensions

For private-sector defined benefit plans, the QDRO process follows federal ERISA rules rather than NHRS-specific requirements. The same general principles apply:

• Request a model QDRO from the plan administrator before drafting
• Get the plan administrator's pre-approval before filing with the court
• Include specific language about whether the alternate payee receives a share of early retirement subsidies, cost-of-living adjustments, and survivor benefits

Valuation Challenges

Pensions are hard to value because the benefit isn't a lump sum — it's a stream of future monthly payments. Two approaches are commonly used:

The present-value method converts the future payment stream into a single dollar amount using actuarial tables, discount rates, and life expectancy calculations. This allows the pension to be offset against other assets (e.g., "you keep the pension, I get the house plus $50,000 in cash").

The deferred-distribution method (the coverture fraction approach) doesn't require a present value. Instead, both parties wait until retirement, and the non-employee spouse receives their percentage of each payment as it's made.

The deferred-distribution method is more common in New Hampshire because it avoids the expense and uncertainty of actuarial valuations.

The New Hampshire Divorce Financial Split & Asset Division Guide includes a Pension Coverture Calculator worksheet that walks through the Hodgins formula with your actual service dates, plus the NHRS QDRO requirements you need to address with the plan administrator.

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