Marriage of Peterson, In re
| Citation | 115 Cal.Rptr. 184,41 Cal.App.3d 642 |
| Court | California Court of Appeals Court of Appeals |
| Decision Date | 05 September 1974 |
| Parties | In re the MARRIAGE of Elizabeth K. and Roy Otto PETERSON. Elizabeth K. PETERSON, Petitioner, Respondent and Appellant, v. Roy Otto PETERSON, Respondent, Respondent and Appellant. Civ. 41895. |
Granville B. Smith, Long Beach, for respondent, respondent and appellant.
Petitioner Elizabeth K. Peterson and respondent Roy Otto Peterson both appeal from those portions of an interlocutory judgment of dissolution of marriage concerning spousal support and community property. The only issue argued on appeal is the disposition of Roy's pension rights as a federal civil service employee.
The parties were married in 1941, and since July 1942 Roy has been employed by the federal government. He is a member of the United States Civil Service Retirement System.
The system permits retirement with a pension under various circumstances, which we will discuss in detail below. This case directly involves a provision that permits an employee to retire and receive a pension at age 55 or more and after 30 years of service. Roy reached the age of 55 in 1971 and achieved 30 years of service on July 2, 1972.
The parties separated in July 1970, and wife filed a petition for dissolution that month. At that time, Roy was about 54 years old. The matter came to trial on May 10, 1972. Meantime, on March 4, 1972, Civil Code section 5118 had gone into effect, and the parties agreed that the community interest in Roy's pension rights would be calculated as of that date. 1
Roy testified that he would be retiring on July 2, 1972, that is, when he had accumulated 30 years' service. The parties agreed that the value of the pension, computed on Roy's earnings to March 1972, was about $815 per month. At trial, everyone proceeded on the assumption that Elizabeth would share in his pension benefits when he started to receive them. 2
The interlocutory decree was entered on May 31, 1972, about a month before Roy would be eligible to retire and collect an immediate pension.
The relevant and disputed portion of the decree provides: 'The (husband) is ordered to pay (wife) as and toward spousal support the sum of $320 per month payable one-half on the first and fifteenth days of each month commencing May 15, 1972 and continuing until further order of court, (wife's) remarriage, or the death of (wife) or (husband).
'. . .nti
'The (husband) has a vested interest in the United States Civil Service Retirement System. Said interest is a community property asset when it is received. The Besides the pension, the total community assets amounted to $7,700.
(wife) is awarded one-half of the United States Civil Service Retirement payment when received by the (husband). Said one-half retirement benefit shall be deemed to be the amount which (husband) would receive should he retire on or about July 2, 1972 after 30 years' employment in the United States Civil Service Retirement System. 3 Any payments made by the (husband) to the (wife) of retirement benefits shall be credited upon the existing $320 per month support order payable to (wife) by (husband) one-half on the first and one-half on the fifteenth of each month commencing on the first and fifteenth of each month following receipt of the first retirement check and continuing. The (husband) is awarded the balance of the retirement benefits. If (wife) survives (husband), she will succeed to such benefits as are allowable under the retirement agreement.'
On June 15--still before Roy was eligible to collect his pension--his attorney filed a motion for a new trial, declaring that he had mistakenly believed that Roy 'was eligible to receive his retirement pension if he had retired prior to July 2, 1972,' that he had learned this was not true after the trial on May 10, and had immediately so written to the trial judge. On August 14, the motion was denied.
In denying Roy's motion for a new trial the court stated:
The pension plan allowed for a lumpsum payment on Roy's death. In July 1971, he changed the beneficiary from Elizabeth to their children. These benefits are discussed below.
More details will be added in the discussion.
The central issue is Roy's contention on his appeal that the trial court erred in awarding Elizabeth one-half of his pension in a decree entered before he was entitled to receive that pension. A second issue is Elizabeth's contention on her appeal that she has an interest in the pension rights if Roy predeceases her.
The federal civil service retirement plan (5 U.S.C. § 8331 et seq.) 4 operates as follows: 5 An employee who has worked a minimum of five years for the government is eligible for an annuity under certain conditions. (§ 8333, subd. (a).) The employee contributes to the retirement plan through payroll deductions. (§ 8334, subd. (a)(1).) The deduction has increased over the years; effective 1969, 7 percent was deducted from the employee's paycheck. (P.L. 91--93, § 102, subd. (a)(1).) The government also contributes to the fund. (§ 8348, subds. (a), (g).)
No benefits are payable until the employee retires. However, on retirement, benefits are payable as follows:
(1) The employee can request a lumpsum payment, consisting of his contributions plus 3 percent interest. (§ 8342, subds. (a), (h); 5 C.F.R., § 831.105.)
(2) An employee may be eligible for 'immediate retirement' and pension when he is more than 55 years of age and has had 30 years of federal service. (§ 8336, subd. (a).) In this case this provision applied to Roy as of July 2, 1972.
(3) An employee may be eligible for 'deferred retirement' if he leaves federal service at too young an age or with too few years of service to be eligible for an immediate pension. In that case, the employee will be eligible for a pension at 62 The amount payable under the plan is based both on years of service and salary earned. (§ 8339, subd. (a).) The amount of the pension does not depend on whether when the employee quits the service, he is eligible for 'immediate retirement' or for 'deferred retirement.' (See § 8339, subd. (h).) 6
years of age, provided that he has accumulated five or more years of federal service. (§ 8338, subd. (a).) Thus, as applied to this case, if Roy had quit his job as of March 4, 1972--the cutoff date for determining the community interest in Roy's pension rights--he would have been entitled to an annuity when he reached the age of 62, that is, in 1978.
Normally, the amount of the pension is automatically reduced to provide for a survivor's annuity. (§ 8339, subd. (j).) The survivor's annuity is payable to 'a spouse to whom (the employee) was married at the time of retirement,' or to 'a widow . . . whom he married after retirement. . . .' (§ 8341, subd. (b).) The employee can, however, elect to take a full pension, which means that the surviving spouse is not entitled to any survivor's annuity. (§ 8339, subd. (j); § 8341, subd. (b).)
In this case, Roy testified that he intended to take a 100 percent pension. The interlocutory decree by stating that Elizabeth 'will succeed to such benefits as are allowable,' arguably requires him to take a reduced pension. We do not know what Roy did, or, indeed whether he has yet retired.
The survivor's pension is one benefit payable when the retired employee dies. There may also be a lump-sum death benefit payable if the employee's contributions exceed the amounts paid out in pensions. (§ 8342, subds. (d) through (h).) It is this lump-sum benefit to which Roy changed the beneficiary from Elizabeth to the children.
Roy apparently does not dispute that his 'retirement contributions withdrawn from (his) salary and employer contributions added in consideration of employee services constitute community property' (Phillipson v. Board of Administration, 3 Cal.3d 32, 40, 89 Cal.Rptr. 61, 65, 473 P.2d 765, 769), and that Elizabeth is entitled to an amount equivalent to one-half of Roy's contributions to the retirement fund during their marriage, since on retirement Roy is certain to receive those contributions. (Id., at pp. 40--41, and p. 41, [41 Cal.App.3d 648] fn. 8, 89 Cal.Rptr. 61, 473 P.2d 765.) (See also, In re Marriage of Jafeman, 29 Cal.App.3d 244, 261, 105 Cal.Rptr. 483; Berry v. Board of Retirement, 23 Cal.App.3d 757, 759, 100 Cal.Rptr. 549.)
Roy, however, contends that the trial court had no power to award Elizabeth one-half of his anticipated pension, because, on March 4, 1972, he had worked only 29 years and was not yet entitled to a pension. He relies on French v. French, 17 Cal.2d 775, 778, 112 P.2d 235, 236; which held that a pension to which the husband would not be entitled 'until he completes a service of 14 years . . . and complies with all of the requirements of that service' is not subject to division as community property. 'At the present time his right to retirement pay is an expectancy. . . .' (See also, Williamson v. Williamson, 203 Cal.App.2d 8, 11, 21 Cal.Rptr. 164.)
Although it is reasonable to expect reconsideration of the 'expectancy' concept as articulated in French v. French, 7 we are bound by the ruling in that case.
At no time before either March 4 or May 30, the date the interlocutory decree was entered, was Roy's interest in an 'immediate retirement' pension more than an 'expectancy,' because conditions precedent to eligibility for an 'immediate retirement' pension had not been satisfied. That pension was payable no earlier than July 2, 1972, when Roy would have conpleted 30 years of service. (§ 8336, subd. (a).) The trial court, therefore, had no power, under French v....
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