Court Opinion

ID: 9688504
Source: CourtListenerOpinion
Date Created: 2023-08-24 17:52:15.219832+00
Date Added: 2024-06-11T18:18:39.786940
License: Public Domain

DIETZEN, Justice
(concurring).
I concur with the majority’s decision in this case, but disagree with portions of its underlying analysis. Specifically, I disagree with the majority’s analysis regarding the availability of Raymond’s pre-mari-tal pension benefits to calculate spousal maintenance. Additionally, I question how the rule announced by the majority, which makes post-dissolution pension payments available as a source for spousal maintenance except those allocated in the judgment and decree, would apply to distributions from defined contribution plans.
To prevail on a motion to modify spousal maintenance, the petitioner must show changed circumstances that make the terms of the original order unfair and unreasonable. Minn.Stat. § 518A.39, subd. 2 (2008). In subdivision 2(d) of section 518A.39, the legislature specifically instructs the district court to consider the factors relevant to an initial award of maintenance under Minn.Stat. § 518.552 (2008) to determine whether to modify spousal maintenance or not.
The majority concludes that pension benefits earned before marriage but received after the judgment and decree in the form of monthly benefits constitute “future income,” and therefore are available for spousal maintenance under Minn. Stat. § 518.003, subd. 3a (2008). Under *644the majority’s reading of the statute, premarital benefits may avoid the designation of “future income,” provided such benefits are allocated in the judgment and decree. The majority implies, however, that the district court may lack the authority to allocate pre-marital property, and that the allocation of such benefits in the property award only occurs in the most unusual circumstances.
I disagree with the majority that such agreements are either unusual or not enforceable between the parties. Rather, agreements to resolve property divisions and spousal maintenance are common place, and are enforceable provided the agreements are part of the judgment and decree entered by the court. See, e.g., MinmStat. § 518.552, subd. 5 (allowing the parties to stipulate to limits on modifications of maintenance provided, among other things, that the stipulation is made part of the judgment and decree). In such cases, pension benefits that the parties have agreed are not available as a source for spousal maintenance should not be considered, even if such benefits are received after the marriage has been dissolved.
In my view, the legislature has given the parties broad rights in limiting the availability of pension benefits for the calculation of spousal maintenance. In particular, subdivision 5 of section 518.552 expressly allows parties through stipulation to preclude or limit the modification of maintenance, provided that the stipulation is made part of the judgment and decree. Subdivision 5 is an explicit recognition by the legislature that private agreements that preclude or limit the modification of spousal maintenance are enforceable, provided they are made part of the judgment and decree. Since parties may enter into enforceable agreements that preclude or limit the modification of spousal maintenance, it is axiomatic that they may also enter into enforceable agreements that limit or expand the income from which spousal maintenance may be paid. Similarly, antenuptial agreements are often used by parties before marriage to resolve potential future disputes over the characterization of property as marital or non-marital and to resolve future disputes over spousal maintenance. Valid antenuptial agreements are also enforceable. See MinmStat. § 518.003, subd. 3b (2008) (including in the definition of nonmarital property real or personal property “excluded by a valid antenuptial contract”).
Second, the majority’s broad characterization of all pension benefits earned before marriage but paid after dissolution as “future income” under Minn.Stat. § 518.003, subd. 3a, creates ambiguity where none exists in the statute. Retirement plans may be divided into two general categories: defined contribution and defined benefit. On the one hand, a defined contribution plan provides an individual account for each employee participant, with retirement benefits based on the amount contributed to the account and any income, expenses, gains, or losses to the account. I.R.C. § 414(i) (2000). A 401k retirement plan is an example of a defined contribution plan in which employer and employee have the opportunity to contribute amounts into an individual account for the benefit of the employee. The amounts contributed to the account are invested by the plan and the balance of the account, consisting of contributions and income earned on those contributions, is available to the employee upon retirement. See LaRue v. DeWolff, Boberg & Assoc., Inc., 552 U.S. 248, 128 S.Ct. 1020, 1022 n. 1, 169 L.Ed.2d 847 (2008) (noting that the participant in a defined contribution or “individual account” plan is promised “the value of an individual account at retirement, which is largely a function of the amounts con*645tributed to that account and the investment performance of those contributions”).
On the other hand, a defined benefit plan provides qualified employees with monthly retirement benefits, the amount of which is calculated according to the plan and which are paid from plan assets as a whole. See Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 439, 440, 119 S.Ct. 755, 142 L.Ed.2d 881 (1999) (noting that a defined benefit plan “consists of a general pool of assets rather than individual dedicated accounts” and “no plan member has a claim to any particular asset that composes a part of the plan’s general asset pool”). Although employees may contribute to the fund, the employer or other plan sponsor agrees to contribute as much as is required to generate the promised benefit. See id. at 439, 119 S.Ct. 755 (noting that “[t]he asset pool may be funded by employer or employee contributions, or a combination of both” but that “the employer typically bears the entire investment risk and ... must cover any underfunding as the result of a shortfall that may occur from the plan’s investments”). Thus, a defined benefit plan does not accumulate a principal amount for the employee, but rather “guarantees” a periodic payment to the employee upon retirement. See Comm’r v. Keystone Consol. Indus., Inc., 508 U.S. 152, 154, 113 S.Ct. 2006, 124 L.Ed.2d 71 (1993) (concluding that in a defined benefit plan “the employee, upon retirement, is entitled to a fixed periodic payment”).
The division of the marital portion of a defined contribution plan does not — indeed, cannot — involve the division of future payments from the plan. Because future payments from a defined contribution plan depend on future contributions and future returns on those contributions — amounts that are not known at the time of the judgment and decree — the division of the marital portion of a defined contribution plan requires the division of the plan balance itself, not the division of future payments from the plan. However, distributions from the plan upon retirement include not only distributions of the plan balance at the time of dissolution, but also distributions of contributions made after dissolution and increases in the plan balance after dissolution attributable to interest, dividends, and net increases in the value of the plan’s investments.
It is unclear from the majority’s approach whether all post-dissolution withdrawals from defined contribution plans, if made periodically, would be considered “future income” available as a source for spousal maintenance, Minn.Stat. § 518.003, subd. 3a, regardless of the allocation of the plan balance in the judgment and decree, because such distributions are “payments” within the meaning of Minn.Stat. § 518A.29 (2008).1 Nor is it clear, if not all post-dissolution withdrawals from defined contribution plans would be considered “future income,” how the majority would distinguish between those that are and those that are not. Given the increasing importance of defined contribution plans in today’s economy, these are questions that I would answer in this case.
In my view, funds deposited to defined contribution plans before or during marriage and awarded to a party, by settlement agreement or otherwise, and made part of the judgment and decree, are not available to calculate spousal maintenance. But the income generated on the amount awarded in the judgment and decree is available to calculate spousal maintenance. Thus, I would draw a distinction between *646the funds awarded to a party as property in the judgment and decree and the income earned on those funds after dissolution. Put differently, the portion of periodic payments made to the former spouse after dissolution that represents the “return of’ the property award should not be available for spousal maintenance; but any “return on” the property award should be available for spousal maintenance. I recognize that determining how much of a given periodic payment is “return of’ the property award versus “return on” the property award is a fact question, and may be a complex determination. But the “return on” the property award is “future income,” within the meaning of Minn.Stat. § 518.003, subd. 3a, or “gross income” within the meaning of Minn.Stat. § 518A.29.

. I acknowledge that the monthly payments received by Raymond after dissolution in this case are apparently from a defined benefit, rather than a defined contribution plan.