Opinion ID: 4104925
Heading Depth: 2
Heading Rank: 2

Heading: Retirement Benefits May be Divisible Marital Property Even if They Rest on a Contingency Such as Plan B.

Text: ¶13 A district court possesses power in a divorce proceeding to divide the marital estate. 14 Title 43 O.S. 2011 §121 requires a fair and just division of jointly acquired property upon divorce. 15 While §121 has specific provisions for military retirement, it does not generally address any pensions much less contingent type pensions such as the Plan B. 16 ¶14 Generally, a pension right burdened with a conjugal interest is a type of marital asset divided between the parties to a divorce. 17 We have said that absent a specific statutory exception. . . a trial court may consider the pension as jointly acquired, make a grant of that property to one spouse and then make a compensating award to the other spouse. 18 The contingent nature of a pension is irrelevant. For example, in Carpenter v. Carpenter , 1983 OK 2, 657 P.2d 646, we addressed pensions acquired through spousal efforts during the marriage and determined them to be divisible marital property under the predecessor to 43 O.S. 2011 §121. 19 ¶15 Carpenter concerned the divorce of a couple who had been married for thirty-six years. At the time of the divorce, the husband had a pension and a profit sharing plan, in which he was a participant, with benefits paying upon his death, disability or retirement. The trial court held that the profit sharing plan was divisible marital property. The Court affirmed, stating: ¶23 In addressing this issue, we do not deem it significant whether the pension is vested in the sense that it is now due and owing, whether it is conditional or contingent upon continued employment for a prescribed period or terminable upon the occurrence nor non-occurrence of some future event. (See In Re Marriage of Brown , 15 Cal.3d 838, 126 Cal. Rptr. 633, 544 P.2d 561 (1976); Hutchins v. Hutchins , 71 Mich. App. 361, 248 N.W.2d 272 (1977).) In any of these events, it is a valuable right which has been purchased through joint efforts of the spouses to the extent that it has been acquired or enhanced during the marriage, and as such becomes jointly acquired property during the marriage. DeRevere v. DeRevere , 5 Wash. App. 741, 491 P.2d 249 (1971). 20 ¶24 The practical problems inherent in dividing a pension which is unmatured or contingent at the time of a divorce are resolved within the language of 12 O.S. 1981 § 1278 itself. It must be divided between the parties as may appear just and reasonable, by a division of the property in kind, or by setting the same apart to one of the parties, and requiring the other thereof to pay such sum as may be just and proper to effect a fair and just division thereof. ¶16 The Oklahoma Firefighter Pension and Retirement System, 11 O.S. 2011 §49-126 expressly addresses the divisibility of firefighter pensions as marital property. It provides for qualified domestic orders, and recognizes former spouses as alternative payees to pension benefits which have been determined to be marital property. 21 Included within its provisions is the express recognition that the DROP/Plan B retirement option is divisible marital property to the extent any benefits which are deposited into it were accumulated during the marriage. Title 11 O.S. 2011 §49-126(9) provides: The alternate payee [former spouse] shall have a right to receive benefits payable to a member of the System under the Oklahoma Firefighters Deferred Option plan provided for pursuant to Section 49-106.1 of this title, but only to the extent such benefits have been credited or paid into the member's Oklahoma Firefighters Deferred Option Plan account during the term of the marriage. Clearly, the Plan B retirement option is divisible marital property because when it is chosen, it is then partially funded with a portion of retirement funds which are attributable to the marital years. The technicality here is simply that it cannot be divided until, at some point in the future, it is chosen, even if that choice occurs post-divorce. ¶17 Other courts have unanimously determined, under similar DROP systems to Oklahoma's, that a spouse is entitled to a portion of that part of their ex-spouse's retirement benefits which are attributable to the marital estate, even if the ex-spouse elects the retirement option deferred plan after the divorce. 22 The only case which does not fall in line with these other courts and our prior caselaw is the Oklahoma Court of Civil Appeals case of Ballinger v. Ballinger , 2014 OK CIV APP 92, 340 P.3d 644, which has facts strickingly similar to this cause. To the extent Ballinger can be read to preclude equitable division of a DROP retirement plan, it is hereby overruled. ¶18 Implicit in the rationale of Carpenter v. Carpenter , 1983 OK 2, 657 P.2d 646, is the idea that pensions, contingent upon the occurrence or non-occurrence of some future event, are valuable rights if the contingency has been acquired through joint efforts of the spouses -- to the extent that it has been acquired or enhanced during the marriage, and as such becomes jointly acquired property during the marriage. Pursuant to 11 O.S. 2011 §49-126(9), supra, firefighter DROP benefits were contemplated by the Legislature as being divisible marital property. ¶19 Firefighter pension rights are vested when a firefighter retires or could retire because the firefighter is eligible for pension benefits. 23 In this cause, the firefighter husband had worked as a firefighter for five years prior to the marriage and an additional sixteen years during the marriage giving him the minimal twenty years necessary, by the time the divorce was filed, to vest in his pension benefits and to vest in his ability to select the Plan B option upon retirement. Although the Plan B is not immediately divisible because it has not yet been funded, or selected, if it is chosen upon his retirement, the former wife is entitled to any portions thereof which were accrued during the marriage. While this calculation may not be easy to make, it is not impossible, nor is its difficulty a reason to deny to the wife what is fair, just and reasonable. Accordingly, the cause is reversed and remanded to the trial court to enter a final divorce decree which protects the wife's interest in the Plan B retirement option should the husband chose to retire and select this option upon his retirement.