CalPERS Model Order A vs. Model Order B

One of the most frequent questions I receive from clients involving CalPERS pensions is: "What's the difference between Model Order B — keeping a shared interest in my ex's pension — versus Model Order A, segregating my share into a separate account? And which one is better for me?" It's a valid question. CalPERS benefits are often a couple's largest asset, and the wrong choice can mean thousands of dollars lost over a lifetime.

The two main options for active or recently separated members not yet receiving their pensions are Model Order A (Separate Account Method) and Model Order B (Time Rule / Shared Interest Method). Model Order C is similar to B but reserved for already-retired members. These are mutually exclusive — you can't mix and match — and importantly, under Family Code §2610(a)(3), the non-member spouse holds the right to choose the method unless the court decides otherwise.

Why CalPERS pensions are divided this way

Under California law, as established in In re Marriage of Brown (1976), pensions are property rights earned through marital efforts — even if not yet vested. In re Marriage of Judd (1977) introduced the "time rule" for fair apportionment, and In re Marriage of Lehman (1998) confirmed that post-separation enhancements like pay raises or COLAs are shared if rooted in marital service. (For the full story on that last point, see our companion article on post-separation enhancements.)

Model Order A: the separate account method

Often called "account segregation," this creates a standalone CalPERS account for the non-member spouse by dividing the member's accumulated service credits and contributions based on the marital period. The benefit is based on the member's compensation at the date of judgment — not future pay — and the non-member can "retire" and start receiving benefits independently, as early as age 50 depending on vesting.

Pros: independence. No reliance on the member's retirement timing — ideal with a large age gap, health issues, or when you want control sooner. Cons: frozen benefits. You miss post-separation boosts like promotions and raises. And while a lump-sum cash-out of contributions plus interest is available, it excludes employer contributions — typically about 11 cents on the dollar in value — and is rarely advisable absent dire circumstances like terminal illness.

Model Order B: the time rule / shared interest method

Here the non-member receives a percentage of the member's eventual retirement benefit using the time rule formula: community share = (service credits during marriage ÷ total service credits at retirement) × the member's benefit at retirement × the awarded percentage (usually 50%). Payment comes directly from CalPERS — but only when the member retires — and includes post-separation enhancements like higher pay or early retirement incentives.

Gillmore rights are retained: if the member is eligible to retire but keeps working, the non-member can petition the court to force a choice — the member either retires so the non-member's share flows from CalPERS, or pays the non-member the equivalent out of pocket until CalPERS later takes over (In re Marriage of Gillmore, 1981).

Pros: growth potential — your share "piggybacks" on promotions and raises, consistent with California's marital foundation theory: careers grow on a foundation built during marriage, and retirement vehicles are not fixed at the point of divorce. Cons: dependency on the member's retirement timing, and the possibility of a future Gillmore action if the member keeps working while the non-member wants payment.

Model Order C, briefly

If the member is already retired, Model C applies — essentially the time rule for benefits already in pay status. The non-member receives a portion of existing payments immediately; there is no segregation option.

Which is right for you?

Weigh age and health (segregation if you need benefits soon; shared if you can wait for growth), the member's career trajectory (expected raises favor shared interest), and your risk tolerance. And avoid the cash-out — trading a lifetime pension for pennies is almost never the answer.