COURT OF APPEALS OF VIRGINIA 

Present: Judges Baker, Willis and Annunziata 

Argued at Alexandria, Virginia 

MICHAEL KAY MANN 

 OPINION BY 

v. Record No. 0342-95-4 JUDGE ROSEMARIE ANNUNZIATA 

 MAY 21, 1996 

AFAF KANAZEH MANN 

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 

Quinlan H. Hancock, Judge 

 Lauren E. Shea (Sherman, Meehan & Curtin, 

P.C., on briefs), for appellant. 

 Philip F. Hudock for appellee. 

 The parties, Afaf Kanazeh Mann ("wife") and Michael Kay Mann 

("husband"), were divorced by entry of a final decree, which 

included an equitable distribution of the parties' assets. Among 

the assets distributed were two retirement plans in which the 

husband participated through his employer. The court awarded the 

wife forty percent of the marital share of each of the two plans. 

 On appeal, the husband contends that the court overstated the 

value of the "marital share" of his defined contribution plan, 

referred to as the Performance Sharing Plan ("PSP"), by failing 

to treat as separate property the income earned passively during 

the marriage on the amount of his premarital contributions to the 

plan.1 The distribution of the defined benefit plan is not at 

issue. For the reasons that follow, we reverse. 

 

 1The wife filed a cross-appeal, the disposition of which 

is addressed in a separate memorandum opinion. 
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 A defined contribution plan is comprised of funds held in 

an account established by the employee through his employer. A 

defined contribution plan is one in which "the employee and the 

employer both make contributions to a retirement plan account, 

and the employee's benefits are expressed in terms of the present 

balance in his account." Brett R. Turner, Equitable Distribution 

of Property § 6.02 (2d ed. 1994); see also Defined Contribution 

Plans, Equitable Distribution Journal Vol.13, No.1, at 1-6 (Jan. 

1996).2

 By contrast, a defined benefit plan defines an 

employee's benefits "as a certain amount per period of time." 

Id. Thus, upon retirement, a defined contribution plan gives an 

employee the funds remaining in his plan account, while "a 

defined benefit plan gives the employee a specific periodic 

benefit." Id. 

 Here, the parties stipulated that husband's PSP was worth 

$23,370 when the parties married and $163,467 when they 

 

 2 Under the Internal Revenue Code, "the 

term `defined contribution plan' means a plan 

which provides for an individual account for 

each participant and for benefits based 

solely on the amount contributed to the 

participant's account, and any income, 

expenses, gains and losses, and any 

forfeitures of accounts of other participants 

which may be allocated to such participant's 

account." Types of defined contribution 

plans include tax-qualified profit-sharing 

plans, stock bonus plans, and 401(k) plans. 

IRAs (Individual retirement accounts) are 

also defined contribution plans, although 

they are not tax-qualified plans. 

Equitable Distribution Journal, supra, at 1-2 (citation omitted). 
- 3 - 

 

separated. Based on these figures, the court classified 

husband's $23,370 pre-marital contribution as separate property. 

 Although husband's accounting expert testified that the value of 

the husband's pre-marital contributions had grown to $61,097 

during the marriage as a result of earnings attributable solely 

to those funds, the court declined to classify as husband's 

separate property the income passively earned on his $23,370 

pre-marital contribution. The court determined the "marital 

share" of the PSP was $140,097 (i.e., $163,467 minus $23,370) 

rather than, as husband contended, $102,370 (i.e., $163,467 minus 

$61,097). 

 Husband contends classification of the PSP is controlled by 

Code § 20-107.3(A) and its tracing provisions.3

 Wife concedes 

 3Code § 20-107.3(A) provides, in part: 

 (1) Separate property [includes] all 

property, real and personal, acquired by 

either party before the marriage . . . . 

Income received from separate property during 

the marriage is separate property if not 

attributable to the personal effort of either 

party. . . . 

 (2) Marital property [includes] . . . (ii) 

that part of any property classified as 

marital pursuant to subdivision A 3 . . . . 

All property including that portion of 

pensions, profit-sharing or deferred 

compensation or retirement plans of whatever 

nature, acquired by either spouse during the 

marriage, and before the last separation of 

the parties . . . is presumed to be marital 

property in the absence of satisfactory 

evidence that it is separate property. . . . 

 (3) The court shall classify property as part 

marital property and part separate property 
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that, under Code § 20-107.3(A), passive income earned by or on 

separate property remains separately classified. However, she 

contends that retirement plans are not subject to the same 

classification and distribution rules applicable to 

non-retirement plan assets, because retirement plans are treated 

as a unique species of property under Virginia's equitable 

distribution law. See Code § 20-107.3(G); Keyser v. Keyser, 7 

Va. App. 405, 412, 374 S.E.2d 698, 702 (1988). For this reason, 

she argues that husband's theory has no basis under Virginia law. 

 Indeed, the issue is one of first impression in Virginia.4

(..continued) 

as follows: 

* * * * * * * 

 b. In the case of any pension, 

profit-sharing, or deferred compensation plan 

or retirement benefit, the marital share as 

defined in subsection G shall be marital 

property. 

* * * * * * * 

 d. When marital property and separate 

property are commingled by contributing one 

category of property to another, resulting in 

the loss of identity of the contributed 

property, the classification of the 

contributed property shall be transmuted to 

the category of property receiving the 

contribution. However, to the extent the 

contributed property is retraceable by a 

preponderance of the evidence and was not a 

gift, such contributed property shall retain 

its original classification. 

 4However, we note that husband's theory of classifying as 

separate the income earned passively by his separate contribution 

has been accepted in other equitable distribution jurisdictions. 

See Equitable Distribution Journal, supra, at 4-5; Thielenhaus 

v. Thielenhaus, 890 P.2d 925, 929-30 (Okla. 1995); White v. 
- 5 - 

 This Court has described pensions as constituting an 

"unusual type of property," Gamble v. Gamble, 14 Va. App. 558, 

565, 421 S.E.2d 635, 640 (1992).5 However, we find no support 

for the view that the legislature intended to exclude retirement 

plans, or any other specific type of property, from the overall 

equitable distribution scheme. See Banagan v. Banagan, 17 Va. 

App. 321, 325, 437 S.E.2d 229, 231 (1993) ("[W]hen pension 

benefits comprise a `portion of the pool of marital assets,' they 

are clearly contemplated by the `scheme' of Code § 20-107.3, 

which is intended to justly distribute the `marital wealth of the 

parties.'") (citations omitted). 

 That scheme is set forth in Code § 20-107.3(A), which 

addresses the classification of property, including retirement 

plans, as either separate, marital, or part marital and part 

separate. The same code section sets forth the "tracing" 

provisions applicable to assets which are part marital and part 

separate. See Code § 20-107.3(A)(3). Under these tracing 

provisions, a retirement benefit which is part marital and part 

separate, is classified in accordance with the definition of 

(..continued) 

White, 521 N.W.2d 874 (Minn. Ct. App. 1994); Getter v. Getter, 

627 N.E.2d 1043 (Ohio Ct. App. 1993); Parker v. Parker, 610 So. 

2d 719 (Fla. Dist. Ct. App. 1992); Brandenburg v. Brandenburg, 

617 S.W.2d 871 (Ky. Ct. App. 1981). 

 5Pension benefits are considered unique in that, in most 

cases, the pension benefits are "future oriented" and not 

"readily susceptible to valuation or distribution at the time of 

an evidentiary hearing." Gamble, 14 Va. App. at 565-66, 421 

S.E.2d at 640. 
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"marital share" set forth in § 20-107.3(G). Code 

§ 20-107.3(A)(3)(b). Code § 20-107.3(G)(1) defines the marital 

share of a pension as "that portion of the total interest, the 

right to which was earned during the marriage and before the last 

separation of the parties." That portion is considered "marital 

property" under § 20-107.3(A)(3)(b). 

 Wife contends that the phraseology, "total interest . . . 

earned during the marriage," has a clear meaning, requiring the 

inclusion as marital property of all funds earned by the PSP 

during the marriage, irrespective of the separate nature of the 

funds contributed. However, wife's reading of Code 

§§ 20-107.3(A)(3)(b) and -107.3(G) ignores the remaining 

provisions of the equitable distribution statutory scheme which, 

upon proof, treats as separate all other species of separate 

property, together with any increases in value passively earned 

by or on the separate property during the marriage. See Code 

§§ 20-107.3(A)(1), -107.3(A)(3)(a). 

 When read in context, the provisions respecting the 

classification of pension funds compel giving similar treatment 

to income passively earned during the marriage from separate 

funds contributed to a defined contribution plan. Under Code 

§ 20-107.3(A)(2), pension funds are characterized as 

"presumptively" marital and only remain so classified in the 

absence of satisfactory evidence that the property is separate. 

This provision is conceptually equivalent to Code 
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§ 20-107.3(A)(3)(d), which provides that separate property 

commingled with marital property retains its original 

classification if it can be retraced by a preponderance of the 

evidence. 

 Furthermore, the "pro-ration" of the PSP urged by husband is 

consistent with the treatment accorded to pension funds held in 

defined benefit plans. Under Virginia law, it is well 

established that the marital portion of a defined benefit plan is 

distinguished from the separate portion by the application of a 

fraction, the numerator of which represents the total time the 

pensioner is employed during the parties' marriage, and the 

denominator of which represents the total time the pensioner is 

employed through the date of retirement. See, e.g., Mosley v. 

Mosley, 19 Va. App. 192, 198, 450 S.E.2d 161, 165 (1994); Primm 

v. Primm, 12 Va. App. 1036, 1037, 407 S.E.2d 45, 46 (1991). The 

fraction diminishes the marital share in relation to the number 

of years that pre- and post-marital contributions are made.6 

Thus, as applied, the fraction effectively excludes from the 

marital share the income earned by pre- and post-marital 

contributions to the pension.7

 

 

 6Because there is no fund account to prorate between marital 

and separate, the time during which benefits were earned is 

prorated instead. See Turner, supra, at § 6.10. Applying such a 

fraction to a defined contribution plan could lead to incongruous 

results, and such an approach is not generally used. See id. at 

n.221. Proration of a defined contribution plan is typically 

accomplished by tracing separately contributed funds. See supra, 

note 3. 

 7The size of the marginal difference will, of course, vary 
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 Different treatment of a defined contribution plan follows 

neither from the nature of the plan, which is characterized by 

readily identifiable fund values during the life of the fund, nor 

from the language of the statute. The trial court, therefore, 

erred in failing to classify as separate the income earned 

passively by husband's separate contributions. 

 In this case, stipulated evidence established the value of 

husband's separate contributions made before the marriage. 

Expert testimony established the value by which the separate 

contributions increased passively. On appeal, wife contends that 

the method used by husband's expert to calculate the increased 

value of husband's separate contributions at the date of 

separation was erroneous. However, wife failed to object to 

husband's method of calculation at trial and is, therefore, 

procedurally barred from raising the issue on appeal. See Rule 

5A:18.8 Accordingly, the evidence of value presented to the 

trial court on this issue stands admitted. 

 Accordingly, we reverse and remand for entry of an equitable 

distribution order consistent with this opinion. Because of the 

statutory interplay between equitable distribution and support 

awards, the trial court will have to reconsider its support award 

(..continued) 

according to the size of the fraction. 

 8We note that wife's objection at trial addressed only the 

issue of whether Virginia law permitted the court to classify as 

separate property the income earned passively by husband's 

separate contributions, an issue we resolve in favor of husband. 
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in light of this opinion. 

Reversed and remanded.