What occurs under the present value method of distribution for pensions?

The present value method of distribution for pensions involves assessing the current value of a pension benefit, which takes into account factors such as the employee's age, years of service, expected retirement age, and any other relevant actuarial calculations. By determining the present value of the pension, it can be effectively treated as an asset that is subject to division during a divorce.

When the present value is calculated, it allows for the pension to be divided along with other marital property in accordance with equitable distribution principles. This method acknowledges the value of the pension as a financial asset that has a quantifiable worth at the time of divorce, rather than being ignored or set aside.

Other options diverge from this principle. Ignoring the present value of the pension fails to recognize its significance as a marital asset. Dividing the pension equally, regardless of the marriage duration, does not consider the contributions made during the marriage. Lastly, distributing the value to the pension holder's heirs does not align with equitable distribution laws that govern property division between spouses. Thus, the correct approach is to assess the pension’s value and divide it in a manner consistent with other marital assets.