Opinion ID: 2385501
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Heading: Retirement Benefits as Marital Property

Text: In Deering we addressed the scope of a spouse's rights in civilian retirement plans acquired by his or her marriage partner during the coverture period. 292 Md. at 117, 437 A.2d 883. We had before us two cases involving pensions. In one case the husband, as a result of his employment as a park police officer, possessed certain unmatured, fully vested pension rights based on obligatory contributions made by him during marriage. Id. at 118, 437 A.2d 883. In the other case, by reason of years of government service, the husband was entitled to a civil service pension upon retirement on reaching a certain age. This pension also had vested but had not matured and was funded in part by obligatory contributions made during marriage. Id. at 120, 437 A.2d 883. We decided that each of these pensions was marital property under the laws of this State. We held that a spouse's pension rights, to the extent accumulated during the marriage, constitute a form of marital property .... Id. at 128, 437 A.2d 883. In reaching the conclusion in Deering that the pensions constituted marital property, we looked to the Property Disposition in Annulment and Divorce Law (the Act). Under the Act `Marital property' means the property, however titled, acquired by 1 or both parties during the marriage. FL § 8-201(e)(1). A pension plan is not one of the properties expressly excluded from marital property. FL § 8-201(e)(2). In the grant of an absolute divorce, if there is a dispute as to whether certain property is marital property, the court shall determine which is marital property. FL § 8-203(a)(1). We recognized in Deering that the Act represents a new legislative approach to the concept of marriage. We called attention to the preamble to the Act in which the General Assembly declared `that marriage is a union between a man and a woman having equal rights under the law [and that] [b]oth spouses owe a duty to contribute his or her best efforts to the marriage, and both, by entering into the marriage, undertake to benefit both spouses....' Deering, 292 Md. at 122, 437 A.2d 883, citing 1978 Md. Laws, Ch. 794 and Report of Governor's Comm. on Domestic Relations Laws (1978). We thought it to be significant that over the past several years, pension benefits have become an increasingly important part of an employee's compensation package which he or she brings to a marriage unit.... [T]he pension right ... may well represent the most valuable asset accumulated by either of the marriage partners. Id. at 122-123, 437 A.2d 883. We found that those states, which, like Maryland, confer authority on courts considering divorce matters to make some form of distribution of joint and separate property upon termination of a marriage, with near unanimity, subject retirement benefits in general to division between the former spouses. Id. at 123, 437 A.2d 883. We set out a compendium of representative cases supporting this statement. Id. at 123-124, 437 A.2d 883. The cases essentially view pension benefits as an economic resource acquired with the fruits of the wage earner spouse's labors which would otherwise have been utilized by the parties during the marriage to purchase other deferred income assets. Id. at 124, 437 A.2d 883. We declared that there is no reason to exclude one form of deferred income asset from the marital estate while including others. Both the nonemployed spouse and his or her wage earning marital partner have the same retirement goals and expectancies regarding the pension benefits as they would if they provided for their later years by using wage income to purchase other investments. Id. at 125, 437 A.2d 883. We thought that it was manifestly contrary to the language and purpose of [the Act] to strip the nonemployee spouse of the value of the retirement asset by precluding the [C]hancellor from evaluating its worth prior to adjudicating the property rights of the estranged marriage partners. Id. We found support for our view in the sweeping language of FL § 8-201(e)(1) which defines, as we have seen, marital property as the property, however titled, acquired by 1 or both parties during the marriage. We noted, quoting Diffendall v. Diffendall, 239 Md. 32, 36, 209 A.2d 914 (1965) that [t]he term property, when considered in a broad sense, is a term of wide and rather comprehensive significiation.... It has been stated that the term embraces everything which has exchangeable value or goes to make up a man's wealth  every interest or estate which the law regards of sufficient value for judicial recognition. Deering, 292 Md. at 125, 437 A.2d 883. Whether a pension is vested or unvested or matured or unmatured is immaterial to a determination of its status as marital property. `In the final analysis, one must determine whether a property right has been acquired during the marriage and whether equity warrants its inclusion in the marital estate in light of its limitations.' Id. at 127, 437 A.2d 883, quoting Weir v. Weir, 173 N.J. Super. 130, 413 A.2d 638, 640 (1980). It was in the light of our comprehensive discussion of the nature of pensions and the impact of the Act on them that we concluded that a spouse's pension rights, to the extent accumulated during the marriage, constitute a form of marital property subject to consideration by the Chancellor in making a monetary award. See Ohm v. Ohm, 49 Md. App. 392, 431 A.2d 1371 (1981). The pension in dispute here became available to Husband during coverture by reason of his employment as a fireman. Like the pensions in Deering, it is a civil, contributory retirement plan to which contributions were made by Husband during the marriage by deductions from his wages. Unlike the Deering pensions, the pension here had matured during coverture  Husband was receiving a retirement allowance. We have seen, however, that neither the fact of vesting nor the fact of maturing is significant to a determination whether a pension is marital property. The major distinction between the Deering pensions and the pension here is that the Deering pensions were service plans while Husband's pension is a disability plan. Deering did not speak directly to disability plans, but we believe that its rationale and authorities fully support the conclusion that a disability plan, in appropriate circumstances, may constitute marital property. We declared in Deering that the fact that a pension right may be contingent upon the happening of certain events does not degrade that right to an expectancy; the law has long recognized that a contingent future interest is property. We agreed with the statement of the court in In re Marriage of Brown, 15 Cal.3d 838, 848, 126 Cal. Rptr. 633, 639, 544 P.2d 561, 567 (1976) (en banc) that such contingencies should not be taken into account by the trial court when determining whether the retirement plan is properly includable in the marital estate. Deering, 292 Md. at 128, 437 A.2d 883. Therefore, despite Husband's importuning, the contingencies to which the payment of his allowance may be subject are not significant to a determination whether the pension is marital property. There are many types of retirement plans under which the rights the beneficiaries possess often differ, depending on a wide variety of factors. Deering, following the dominant trend of the law, rejected such distinctions in making the threshold determination of whether a retirement plan is marital property. 292 Md. 126-127, 437 A.2d 883. Consideration of any contingent nature of such rights is postponed until a valuation of the marital property is made. Id. Pension payments are actually partial consideration for past employment whether the maturity of the pension is contingent upon age and service or upon disability. Thus, a disability plan, like a service plan, is property and, within the meaning of the Act, constitutes marital property subject to equitable distribution. Inasmuch as the teachings of Deering with respect to service plans are equally applicable to disability plans, Deering is dispositive of the issue now considered. The allowance received by Husband under the disability plan constitutes marital property. We hold that the Circuit Court for Carroll County did not err in so determining. [3]