King v. Cerbone
| Citation | 101 Mass.App.Ct. 783,197 N.E.3d 419 |
| Docket Number | 21-P-214 |
| Decision Date | 04 October 2022 |
| Parties | Philip M. KING v. Antonietta CERBONE. |
| Court | Appeals Court of Massachusetts |
W. Sanford Durland, III, for the wife.
Robert R. Herrick, Springfield, for the husband.
Present: Green, C.J., Sullivan, & Henry, JJ.
Among the marital assets subject to division in divorce proceedings are the respective spouses’ pension plans. This matter comes before us on a partial judgment of civil contempt after the parties were unable to agree, following a divorce judgment, on an order designed to divide one portion of the former husband's (husband) Federal pension. Although a seemingly idiosyncratic dispute, the issues raised highlight the challenges faced by parties and judges in crafting judgments and subsequent orders dividing pensions. For the reasons that follow, we vacate the partial judgment of contempt.
Because of the complexity of pension plans, and the "comprehensive and reticulated" statutory and regulatory schemes that govern them (citation omitted), Mertens v. Hewitt Assocs., 508 U.S. 248, 251, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993), the administrators of pension plans must first approve a proposed division before the division can be enforced as a court order and implemented by the plan administrator. In the private sector, the parties draft what is known as a domestic relations order (DRO). See § 206(d)(3)(G)(i), (ii) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), 29 U.S.C. § 1056(d)(3)(G) ; 26 U.S.C. § 414(p)(1), (6)(A)(ii). Once approved by the plan administrator, it becomes a qualified domestic relations order (QDRO), and may be entered as an order of the court.1 Where a Federal Employee Retirement System (FERS) pension is concerned, it is the United States Office of Personnel Management (OPM) that approves and administers what is called a "court order acceptable for processing" (COAP). See 5 U.S.C. § 8467 ; 5 C.F.R. §§ 838.101 - 838.1018.2 The process of drafting and finalizing an order that a plan administrator can approve and that a court may enter can be as complex as the plans themselves.
This appeal presents one such case involving the interpretation of OPM regulations governing COAPs and the COAP approval process, and the distinctions drawn in those regulations between the role of OPM and the role of the Probate and Family Court judge. The matter comes before us on the former wife's (wife) consolidated appeals from a partial judgment finding her in contempt for failing to agree to a COAP governing the division of the husband's FERS pension benefits and awarding attorney's fees, and the subsequent denial of her motion for relief from judgment pursuant to Mass. R. Dom. Rel. P. 60 (b). We vacate the partial judgment of contempt, as we conclude that the OPM regulations do not limit a judge's authority to enter a judgment dividing the FERS "Basic Benefit" so long as the divorce judgment and ensuing COAP provide a form of benefit that falls within the FERS "Basic Benefit Plan." We also conclude that a divorce judgment that effectuates a percentage division of a pension benefit carries with it rights of election recognized by the applicable plan unless the judge (or the parties to a separation agreement) provides otherwise, and the relevant plan permits the restriction.
Background. The FERS pension scheme has three distinct components: (1) a "Basic Benefit Plan," based on age, salary, and years of creditable service, payable as an annuity; (2) Social Security; and (3) a "Thrift Savings Plan" (TSP), an individual account, defined contribution plan, the value of which is based on contributions made by the employer and the employee. See OPM, Retirement Services, FERS Information, https://www.opm.gov/retirement-services/fers-information [https://perma.cc/932K-THPS]; https://www.opm.gov/retirementservices/fers-information/computation [https://perma.cc/YG6Q-DS7U]. The only matter in contention on appeal is the division of the Basic Benefit Plan component of the FERS pension.3 The division of the TSP and the proposed COAP await finalization without apparent controversy. 4
For simplicity's sake, we shall adopt the nomenclature used by the judge before whom the divorce case was tried (trial judge) and refer to the Basic Benefit Plan as the "FERS pension" for the balance of this opinion.
The parties were married for over twenty years, and upon dissolution of the marriage, the trial judge "awarded one-half of the marital coverture portion" of the husband's FERS pension and the wife's two retirement accounts to each party. The wife had worked in the private sector and the trial judge ordered, based on the parties’ agreement, an equal division of that retirement account, as well her teacher's pension. An additional provision of the divorce judgment applicable to the FERS pension stated:
5
The trial judge further ordered that
In July and August of 2019 the parties filed cross complaints for contempt alleging a failure to cooperate in the COAP drafting process. On September 5, 2019, the parties, after hearing, stipulated that "the parties shall hire attorney Margaret Carleen to draft orders dividing retirement assets (four orders total) pursuant to [the] judgment of divorce by 30 Sept. 2019." This stipulation was incorporated into an order of the same date.
The husband, however, disagreed with language in the proposed COAP drafted by Attorney Carleen requiring that the wife's share of the FERS pension be paid to the parties’ children if the wife predeceased the husband. During a hearing on November 7, 2019, a different judge (contempt judge) ordered the parties to file memoranda addressing the question whether the proposed COAP was consistent with, or "in violation of," the terms of the divorce judgment. The contempt judge further directed the parties to "detail[ ] their respective positions on the following disputed issues: (a) the amount of [the wife's] share of the FERS pension plan; (b) the disposition of [the wife's] share of the FERS pension plan if she predeceases [the husband]; and (c) the survivor annuity."6
The contempt judge found the wife in civil contempt for "unilaterally" directing Attorney Carleen to draft the COAP at the wife's "sole direction," without consultation with the husband, resulting in the inclusion of terms that the husband claimed were "contrary" to the divorce judgment. The contempt judge ordered the wife to pay the husband's contempt-related attorney's fees and ordered that the COAP be revised to include language directing that the wife's share of the FERS pension revert to the husband if she predeceased him.
The contempt judge reasoned that the Code of Federal Regulations governed the allocation of the wife's share of the FERS pension if she predeceased the husband:
This appeal followed.
Discussion. 1. OPM regulations. Before addressing the particulars of the contempt judgment, we briefly describe the regulatory scheme applicable to FERS COAPs and the division of FERS benefits.8
OPM is charged with administering State court orders dividing a FERS pension benefit. 5 C.F.R. § 838.101(a)(1). A court order is acceptable for processing if it meets certain criteria set forth in the regulations. See 5 C.F.R. §§ 838.301 - 838.306. In general, the order must identify the plan, the participant (that is, the...
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