Opinion ID: 1904395
Heading Depth: 1
Heading Rank: 2

Heading: When is Property Acquired After Separation Marital Property?

Text: Appellant next contends that certain property that he received after he and appellee separated is not marital property. Specifically, appellant claims that retirement incentives, a lump-sum retirement incentive, and a portion of his Bethlehem Steel Savings Plan were improperly included in the marital estate by both the master and the lower court. [6] Marital property is defined generally as follows: All property, whether real or personal, acquired by either party during the marriage is presumed to be marital property regardless of whether title is held individually or by the parties in some form of co-ownership such as joint tenancy, tenancy in common or tenancy by the entirety. The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (e). 23 P.S. § 401(f). However, [p]roperty acquired after separation until the date of divorce is not marital property. Id. § 401(e)(4). Reading these two provisions together, we find that the § 401(f) presumption merely begs the question here: when was the property acquired? We agree with appellant that he received the above three items of property after he separated from appellee. But that is not an end to the question. This Court has noted: It is acknowledged in jurisdictions requiring the distribution of marital property that a spouse has a right, co-extensive with that of a wage-earner spouse, to a portion of retirement benefits accrued during marriage. Flynn v. Flynn, 341 Pa.Superior Ct. 76, 82, 491 A.2d 156, 159 (1985) (emphasis added). We have also stated that to deny one spouse a share of the other's retirement benefits would deny the former something he or she helped to achieve during the marriage. Braderman v. Braderman, supra, 339 Pa.Superior Ct. at 194, 488 A.2d at 617. Each spouse has a reasonable expectation of enjoying the monies received from an employee retirement fund. Id., 339 Pa.Superior Ct. at 194, 488 A.2d at 617. Accordingly, we have held: Since a pension benefit is an economic resource acquired with funds that would otherwise have been utilized by the parties during their marriage to purchase other assets, it constitutes marital property. This determination is made without regard to the possibly contingent nature of the pension, whether or not it has vested or matured. Flynn v. Flynn, supra, 341 Pa.Superior Ct. at 83, 491 A.2d at 160. See generally Braderman v. Braderman, supra, 339 Pa.Superior Ct. at 192, 488 A.2d at 616 (distinguishing among types of retirement or pension benefits). However, only that portion of the pension attributable to the period commencing with the marriage and ending on the date of separation is marital property within the meaning of the Divorce Code. King v. King, 332 Pa.Superior Ct. 526, 530, 481 A.2d 913, 915 (1984). Thus, the above cases suggest that it matters not when a spouse receives property, but whether the right to receive such property accrues during the marriage. To the extent that a property right accrues or arises during the marriage, then, the spouses expect they will enjoy the property when they receive it. With these principles in mind, we will consider appellant's contentions. Appellant first contends that the retirement incentives he received after his separation from appellee are not marital property. We agree. Appellant elected to participate in a Bethlehem Steel Corporation Special Early Retirement Incentive Program pursuant to which he was to receive a payment of $813.20 for twenty-one months beginning in November, 1983. Appellant argued below that those payments were a special sweetener offered by [his] employer for early retirement, a benefit or option which had not accrued prior to the separation. (Appellant's Exceptions to Master's Report no. 6 at 2). The lower court found that the payments were marital assets because they were received in lieu of the regular pension and surviving spouse benefit in part. (Lower Court Opinion ¶¶ 9, 12 at 4). This is incorrect. The twenty-one month payments were to be received in addition to the regular pension and special (lump-sum) payment and were equal to twenty-five percent of an employee's monthly salary. See Bethlehem Steel's General Announcement to All Nonrepresented Salaried Employees. The crucial point is this: eligible employees were not notified of the program until April, 1983. See id. Employees had to decide no later than May 31, 1983, whether they wished to participate in the plan and they had to retire by July 31, 1983. Appellant did both. Therefore, this property right did not accrue prior to the parties' separation. Appellee could not have expected to enjoy these payments when appellant received them because neither party had any idea that he would receive the payments until after they separated. Accordingly, we reverse the lower court's order insofar as it includes these payments in the marital estate subject to equitable distribution. The lower court also found that appellant's special lump-sum retirement payment of $10,549.00 was properly included as a marital asset since it was received in lieu of the regular pension and surviving spouse benefit in part. (Lower Court Opinion ¶ 9 at 4). The record supports this conclusion. In a letter to Dear Fellow Salaried Employee from Bethlehem Steel's Vice Chairman and Chairman of the General Pension Board, appellant was notified that the company's pension plan provides that an eligible salaried employee can apply for and, upon meeting specified requirements, receive a lump-sum payment in lieu of the special payment, regular pension and surviving spouse benefit. See also General Pension Board's Notice of Change in Interest Rate Used in Lump-Sum Payment Calculations. Therefore, this lump-sum payment was received in lieu of benefits that accrued to appellant while he was married and was correctly included within the marital estate. [7] Appellant also contends that the master erred in including the entire amount, $15,610.00, [8] of his Bethlehem Steel Savings Plan as a marital asset. We agree. Only those contributions to the plan made by appellant (and the company's matching contributions) during the time that the parties were married are marital property. Contributions made after the date of their separation obviously did not accrue to appellant before their separation date. We therefore reverse the lower court's order insofar as it includes the full amount of the savings plan in the marital estate. In his inventory and appraisal, appellant valued the plan at $9,000. On remand, the court shall determine the value of the plan as of July 4, 1980, and adjust its award accordingly.