NO. 88-223 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

IN RE THE MARRIAGE OF 

BEVERLY C. ROLFE, 

Respondent and Petitioner, 

and 

OLIVER W. ROLFE, 

Appellant and Respondent. 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable Douglas G. Harkin, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Fred Thonson, hlissoula, Montana 

For Respondent : 

Rebecca Sumrnerville; Datsopoulos, PlacDonald & Lind, 

Missoula, Plontana 

Submitted on Briefs: Sept. 1, 1988 

Decided: October 14, 1988 

Filed: 

Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

This is an appeal from the Fourth Judicial District 

Court, Missoula County, Montana. Appellant Oliver Rolfe 

appeals the District Court's denial of an award of child 

support from the respondent and its valuation of his 

retirement benefits. We affirm on both issues. 

This case is presented to us after remand with 

instructions on the property distribution. See, Rolfe v. 

Rolfe (Mont. 1985), 699 P.2d 79, 42 St.Rep. 623. While our 

remand instructions focused on a number of inequities in the 

property division, the present appeal concerns only the 

proper valuation of Oliver Rolfe's retirement benefits. A 

brief set of facts will be discussed in this opinion. 

Beverly Rolfe (hereinafter wife) and Oliver Rolfe 

(hereinafter husband) were married in 1968 and divorced in 

1983. They have two sons, Jonathan and Alexander. Sole 

custody of the children was awarded to husband, with 

supervised visitation for wife. The husband has a Ph.D. in 

Romance Linguistics and is a tenured professor at the 

University of Montana. Husband has been employed with the 

Montana University System since 1971, and in conjunction with 

his employment, contributes to the Montana Teachers' 

Retirement System. Husband, at the time of the dissolution, 

had an average yearly salary of $28,484. 

Wife was a homemaker throughout the marriage. She has 

a B.A. in Education and taught for several years prior to the 

marriage. On remand, the District Court found that although 

wife could acquire the necessary quarter credits to gain a 

teaching certificate, the surplus of elementary school 

teachers in Missoula and keen competition for available jobs 

made such employment problematic. In wife's current job as a 
medical transcriptionist she earns approximately $11,000 

annually. The maximum wage available in the field is 

approximately $15,288 annually. In addition, wife would like 

to gain employment in the legal secretarial field. Because 

of the limited teaching positions in Missoula, the greater 

opportunities in the legal secretarial and medical 

transcriptionist fields and insignificant wage differences, 

the District Court found wife's plan for training and 

employment reasonable. 

On remand, the District Court heard substantial 

evidence from experts regarding the proper valuation of the 

retirement benefits, as per our instructions. From this 

evidence, the lower court made extensive findings, concluding 

the retirement benefits should be divided according to a 

formula, as they are received. 

The husband raises two issues on appeal. First, 

husband attacks the pension valuation, asserting the trial 

court impermissibly included non-marital assets in the 

valuation. Second, husband argues the lower court erred in 

refusing to award child support to he paid by wife. 

Issue No. 1: Pension Valuation 

The husband's first issue focuses on the proper 

valuation for retirement benefits. It is well established in 

this state that retirement benefits are a part of the marital 

estate. Karr v. Karr (Mont. 198L), 628 P.2d 267, 38 St.Rep. 

506. The question is what value to assign to the pension for 

proper division of the marital asset. While we attempted to 

give instructions in our previous decision, we recognize such 

assets contain numerous contingencies, thereby avoiding 

categorical formulas. 

To begin our decision, an in depth review of the 

specific retirement plan is in order. The Montana Teachers' 
Retirement System (hereinafter MTRS) plan provides for both 

employee and employer contributions, 7.044% and 7.428% 

respectively, based upon the rate of salary earned each 

month. The plan benefits become a vested right after five 

years of full-time service in Montana for which contributions 

have been made. Benefits are computed according to a 

formula : 

Creditable Service Average 

Annual Benefit = 60 x Final 

Compensation 

The annual retirement benefit is paid in twelve equal monthly 

installments. The average final compensation value is the 

highest average of earned compensation during three 

consecutive years of full-time service. 

Once an employee ceases teaching in Montana, he may 

apply for benefits. Benefits are payable in full after 25 

years of service, regardless of age. However, an employee 

with less than 25 years of service can retire as early as age 

50, at a reduced benefit. The normal retirement age is 60. 

The reduction is .5% for each of the first 60 months the 

retirement date precedes age 60 or 25 years of service, and 

.3% for each additional month. At trial, experts testified 

Dr. Rolfe's benefits would be reduced 37.2% if he were to 

retire at age 50. In addition, the MTRS plan does not 

provide for lump sum distribution of benefits prior to age 

50. An employee may, however, obtain a refund of employee 

contributions upon withdrawal from the plan. 

Generally, the proper test for determining the value of 

a pension is the present value. In re Marriage of Bowman 

(Mont. 1987), 734 P.2d 197, 203, 44 St.Rep. 488, 494. Given 

the various contingencies, however, present value may not be 

adequate to value the asset. For instance, our earlier 

decision instructed the District Court to not only consider 
the amount of husband's contributions, but also to consider 

nonvested pension benefits in the form of employer's future 

contributions. Rolfe, 699 P.2d at 83. These nonvested 

amounts are analogous to deferred compensation which the 

husband earned during the marriage. In re Marriage of Pryor 

(Mont. 1986), 731 P.2d 895, 898, 43 St.Rep. 2358, 2361. The 

employer's future contributions, like husband ' s 

contributions, are a factor of monthly salary, an amount 

which could not accurately he determined. In addition, the 

plan's reduced benefit formulation varies significantly with 

the individual. Numerous other contingencies associated with 

retirement benefits, including early retirement or 

disability, are equally elusive of accurate calculation. 

Rather than attempt to project each individual 

contingency, the District Court developed a formula to divide 

the pension benefits: 

Years of Service During Marriage x Monthly Benefit x 1/2 

Years of Total Service (after taxes) 

The division of retirement benefits upon receipt is 

commonly known as the "time rule" and was mentioned in our 

earlier decision via citation to In re Marriage of Brown 

(Cal. 1976), 544 P.2d 561. See, Rolfe, 699 P.2d at 83. 

Under this method, the marital interest is represented by a 

fraction, the numerator of which is the length of the 

employee's service during the marriage, and the denominator 

is the employee's total length of service. This fraction is 

then applied to each benefit payment, lump or periodic, to 

determine the portion earned during the marriage. Although 

the extent of the marital interest is determined as of the 

date of the dissolution, the benefit factors to be applied to 

the pension credits earned during the marriage are those in 

effect at retirement. Thus, the non-employee spouse is 

entitled to increases or accruals on her interest because of 
the delay in receiving those payments. McNamara, Dividing 

Pension Benefits Upon Divorce, ALI-ABA Course Materials 

Journal, No. 2, 33, 42 (1983). 

Husband argues this formula impermissibly includes 

non-marital property in the form of future employee 

contributions, and does not finally apportion the marital 

estate. Husband would urge this Court to value the pension 

as of the date of dissolution, yet suspend payment until he 

retires. This position is flawed in three respects. First, 

the monthly pension benefit is not determined by the amount 

of contributions, but instead by the highest average salary 

earned over three consecutive years. Therefore, the only 

amounts which could arguably be called post-marital property 

are possible salary increases received prior to retirement. 

As the husband's expert testified at trial, Dr. Rolfe 

historically received a 3% increase each year. The trial 

court expressly excluded any amounts unique to husband, such 

as merit pay raises. Second, each party is well aware of 

their respective percentage of pension benefits: the fraction 

represents the marital interest. Third, to value payments 

now, without also demanding an immediate cash payment to 

wife, would result in an unfair windfall to husband. Wife 

could easily earn over 3% were she able to invest the money 

immediately. Certainly husband recognizes the inequity in a 

delay without corresponding interest. 

Husband also claims the order effectively binds him to 

continued employment with the University, and in turn, MTRS 

plan. This Court fails to see the basis of husband's 

argument. On the contrary, the judgment allows Dr. Rolfe 

continued volitional choice. As part of its detailed 

findings, the District Court included numerous applications 

intended to illustrate possible status changes, including 

early retirement, disability, death or retirement after age 
60 (normal age). The formula adopted allows the parties to 

share the risks while protecting wife's interest. 

The judgment is not unusual. As cited above, the 

California Supreme Court recognized the difficulties 

associated with pension valuation, stating: 

[I]f the court concludes that because of 

uncertainties affecting the vesting or 

maturation of the pension that it should 

not attempt to divide the present value 

of pension rights, it can instead award 

each spouse an appropriate portion of 

each pension payment as it is paid. This 

method of dividing the . . . interest in 

the pension renders it unnecessary for 

the court to compute the present value of 

the pension rights, and divides equally 

the risk that the pension will fail to 

vest. 

Brown, 544 P.2d at 567. Additional guidelines as to division 

of the pension may be found in earlier cases, including In re 

Marriage of Glasser !1983), 206 Mont. 77, 85, 669 P.2d 685, 

689, quoting Matter of the Marriage of Rogers and Rogers (Or. 

1980), 609 P.2d 877, 882-883, stating that: 

(1) The distribution should generally be 

based on contributions made during 

marriage. (2) The courts should 

continue to strive to disentangle the 

parties as much as possible by 

determining, where equitable, a sum 

certain to be paid rather than a 

percentage based upon expected future 

contingencies. (3) In determining 

whether a lump sum award is appropriate, 

courts should consider the burden it 

would place on the paying spouse in view 

of required child support, spousal 

support, and other property distribution. 

(4) Where courts determine that the 

parties will share in the benefits on a 

proportional basis, the parties should 

also share the risks of future 

contingencies, e.g., death of the 

employe[el spouse or delayed retirement 
of the employe[el spouse, and payment 

should be to the receiving spouse as the 

employe[e] spouse receives the retirement 

pay. (5) Courts should consider, where 

appropriate, an award of a portion of 

retirement benefits where other property 

awarded is not adequate to make an 

equitable distribution. 

The findings illustrate the District Court's complete 

understanding of the situation. The distribution is 

beneficial to both parties, providing for wife's security in 

later years without a reduction in needed current income, and 

suspending a burdensome cash payment. Flhile husband may 

argue such continued jurisdiction is inappropriate, we point 

to the much more onerous task of maintenance supervision, a 

burden continually accepted by the district courts. Brown, 

599 P.2d at 568. More to the point, there appears to be no 

alternative to effect a division of the MTRS benefits, given 

the mechanics of the plan, nature of the property and desires 

of the parties. The lower court may, therefore, retain 

jurisdiction to supervise the implementation of the order 

when the employee retires. See, Johnson v. Johnson (Ariz. 

1981), 638 P.2d 705; Shill v. Shill (Idaho 19?9), 599 P.2d 

1004. 

The District Court is granted substantial discretion to 

devise a method to accomplish an equitable distribution. In 

re Marriage of Johnsrud (1977), 175 Mont. 117, 122, 572 P.2d 

902, 905. In this case, the District Court saw numerous 

problems and developed a reasonable alternative supported by 

very detailed findings. We see no abuse of discretion. 

Issue No. 2: Child Support 

Husband also challenges the District Court's denial of 

child support, arguing the lower court failed to consider the 

statutory criteria. Husband also points to our Uniform Child 
Support Guidelines (Mont. 1987), 44 St.Rep. 828, claiming 

only a parent mentally or physically incapacitated will be 

excused from paying child support. Not only do the adopted 

guidelines make no such conclusion, but expressly state the 

guidelines are not binding on judges to prevent appeals based 

on a claimed failure to observe the recommendations. Their 

major purpose is to produce a uniform and equitable approach 

to the statutory standard. 

Section 40-4-204(1), MCA, states the factors the 

District Court must consider in an award of child support, 

including: 

(a) [Tlhe financial resources of the 

child; 

(b) the financial resources of the 

custodial parent; 

(c) the standard of living the child 

would have enjoyed had the marriage not 

been dissolved; 

(dl the physical and emotional condition 

of the child and his educational needs; 

(e) the financial resources and needs of 

the noncustodial parent . . . 

However, if the court does not order a parent to pay child 

support, it must state the reasons for doing so. Section 

40-4-204 (2), MCA. From the District Court's numerous 

findings, we list a few to illustrate t.he thorough 

consideration given to the statutory factors: 

58. Bev's monthly expenses exceed her 

monthly income by $200 per month. 

59. Wil is a tenured professor 

currently under a ten-month 

contract at the University of 

Montana and earned a gross annual 

salary of $28,484 at the time of 

the dissolution. 
60. Wil is not under contract for the 

two summer months and he could seek 

employment during that time. 

64. Tililts yearly income is over two 

times Bev's yearly income. 

65. Considering the . . . increase in 

Wil's expenses attributable to the 

children and his substantially 

larger income, the needs of the 

children can be met without the 

payment of support by Bev. There 

will not be a reduction in the 

standard of living experienced by 

the children and Rev will be in a 

better position to meet her 

financial obligations. 

66. Bev has only minimal ability to 

acquire future assets. 

67. Wil does have the ability to 

acquire future assets because of 

his admitted astute business 

skill. . . 

In support of his argument, husband points only to the 

increase in expenses attributable to his custody of the 

children. But as the statute makes clear, expense is not 

determinative. Considering each parties' financial 

positions, current and future, and the standard living 

enjoyed by the children, the District Court found an award of 

child support inapplicable. 

The decree of the District Court clearly indicates all 

the statutory factors were considered. Child support awards 

will not be disturbed on appeal unless there has been a clear 

abuse of discretion resulting in substantial injustice. In 

re Marriage of Alt (Mont. 1985), 708 P.2d 258, 261, 42 
St.Rep. 1621, 1626. We find no abuse of discretion on this 

issue. 

Affirmed. 

We concur: 1