Opinion ID: 1846792
Heading Depth: 3
Heading Rank: 1

Heading: Pre-Marital Pension Benefits

Text: In subtracting from his income only the portion of Raymond's monthly pension payments derived from benefits earned during marriage and previously awarded to him as marital property, the district court implicitly held that Raymond's pre-marital pension benefits could be included in the court's calculation of his monthly income. [6] The court of appeals took a different view, holding that pension benefits earned prior to the parties' marriage could not be included when calculating Raymond's monthly income as a matter of law. Lee, 749 N.W.2d at 58. The court of appeals concluded that present payments of pension benefits acquired by Raymond before marriage are not future income or earnings within the meaning of Minn.Stat. § 518.003, subd. 3a, reasoning that characterizing pre-marital benefits as future income ignore[s] the fact that payment of pension benefits is really a distribution of an investment comprising employer contributions for work performed during a certain period, employee contributions for that same period, and appreciation on that investment. Lee, 749 N.W.2d at 58. We disagree. Future income or earnings, as the court of appeals acknowledged, refers to a time frame. In this case, the word future limits the potential sources for maintenance to income or earnings received after the marriage has been dissolved (or, more precisely, after the date of valuation, see Minn.Stat. § 518.58, subd. 1 (2008)). The crux of the interpretive dispute is whether pension benefits are considered income or earnings at the time the benefits are earned or at the time the benefits are received. A review of the applicable statutory provisions convinces us that Raymond's pension benefits not previously awarded as property are properly considered income at the time the benefits are received. Minnesota Statutes § 518A.39, subd. 2, the section governing the modification of existing maintenance awards, states that an order respecting maintenance or support may be modified upon a showing of... substantially increased or decreased gross income of an obligor. (Emphasis added.) Gross income, in turn, includes... pension and disability payments, Minn.Stat. § 518A.29 (2008), without any restriction as to when the pension benefits were earned. The legislature's use of the term payments in section 518A.29 is of particular significance, indicating a legislative intent to consider pension benefits as income when the obligor actually receives a disbursement of pension funds. In contrast, the statute governing the division of marital property states that [m]arital property includes vested public or private pension plan benefits or rights, acquired by the parties. Minn.Stat. § 518.003, subd. 3b (2008). Pension rights are also described as rights in the form of future pension plan payments.  Minn. Stat. § 518.58, subd. 4(a) (emphasis added). These provisions demonstrate that the legislature knew how to distinguish between vested pension rights  pension benefits earned but not yet received  and actual pension payments. The court of appeals also concluded that current payments of pre-marital pension benefits should be characterized as non-marital property, rather than income. Lee, 749 N.W.2d at 58. Non-marital property is defined as property acquired before or after the marriage relationship. Minn. Stat. § 518.003, subd. 3b. [7] Assuming (as both parties do here) without deciding that pension benefits earned before marriage are non-marital property, this fact alone does not foreclose the conclusion that pre-marital pension benefit payments may also be characterized as future income available for maintenance. The plain language of the statute authorizes courts to consider pension benefit payments as income [8] when calculating maintenance awards; this consideration is subject only to the rule, agreed to by both parties, that pension benefits that have previously been awarded as marital property cannot also be considered income. As applied to this case, we agree with Elaine that the district court properly included payments derived from Raymond's pre-marital pension benefits in its calculation of Raymond's monthly income. The payments at issue were covered by the statutory definition of gross income, and were received by Raymond well after the parties dissolved their marriage, qualifying them as future income within the meaning of Minn.Stat. § 518.003, subd. 3a.