Swanson v. Swanson, 4D03-1178.

• Decision Date: 07 April 2004
• Docket Number: No. 4D03-1178.,4D03-1178.
• Citation: 869 So.2d 735
• Parties: Vivian Ann SWANSON, Appellant, v. Donald E. SWANSON, Appellee.
• Court: Florida District Court of Appeals

869 So.2d 735

Vivian Ann SWANSON, Appellant, v. Donald E. SWANSON, Appellee.

No. 4D03-1178.

District Court of Appeal of Florida, Fourth District.

April 7, 2004.

Christopher C. Cloney of Cloney & Cloney, P.A., Fort Lauderdale, for appellant.

Michele Cummings and Robyn Vines of Ruden, McClosky, Smith, Schuster & Russell, P.A., Fort Lauderdale, for appellee.

POLEN, J.

The former Wife, Vivian Ann Swanson, appeals the equitable distribution provisions of the trial court's post-judgment order. In equitably dividing the marital property, the trial court ordered that each spouse receive 45% of the value of the other spouse's pension fund at its value as of January 17, 1990, the date of the final judgment of dissolution of marriage. Though we find no error with the trial court's initial distribution, we disagree with how the 45% of the respective pension funds were calculated. For the following reasons, we reverse the order of the trial court and remand with instructions to enter an amended order in accordance with this opinion.

On July 1, 1998, the former Husband became a participant in a Deferred Retirement Option Program (DROP), in which his pension benefits accrued interest and cost of living adjustments during participation. However, the Husband continued to work and receive salary until January 2003, when he received a lump sum payment equivalent to fifty-five months of retirement benefits. The former Wife sought a valuation of the former Husband's pension by moving for a Qualified Domestic Relations Order (QDRO). The former Wife's motion was amended to request a lump sum award of her share of the accrued DROP benefits. The former Husband, in response, sought a valuation of the Wife's pension as well.

As of September 2002, both spouses were vested. A hearing was held to calculate each spouse's 45% share of the other's pension. It was determined that the former Husband's pension fund in 1990 was worth $16,594 annually ($1,392 per month) if he attains full retirement or $10,440 annually ($870 per month) if he retires early. The trial court applied the early retirement calculation when valuing the former Husband's pension and determined the value to be $840.59 per month; however, when valuing the former Wife's pension at its 1990 value, the trial court assigned an annual value of $3,728.88 ($310.74 per month). This value was based upon the full retirement scale, because in 1990 the former Wife's pension had not yet vested. Therefore, had she retired early or otherwise been terminated, she would have lost her entitlement to those benefits.

Having determined the respective value of each pension, the trial court ordered that the former Husband's share (45% of $310.74, or $139.83) be deducted from the former Wife's share (45% of $840.59, or $378.27), resulting in a net benefit of $238.44 each month for the former Wife. The trial court ordered the offset to be applied immediately and retroactively to the former Husband's fifty-five months of accumulated benefits despite the fact that the former Wife was, and presently is still, not retired and thus not entitled to her pension benefits yet. This resulted in the former Wife being entitled to a lump sum payment of $13,090. However, the trial court also found that the Husband was taxed on the lump sum payment, and therefore imputed a tax rate of 15%, with the former Husband's consent, to the former Wife's portion, which amounted to $1,964. Ultimately, the former Wife received a lump sum payment of $11,126. Thereafter, the trial court ordered that the Wife receive $238.44 monthly commencing February 2003.

First, the trial court erred in calculating the Husband's pension value based upon an early retirement penalty. Florida law prohibits acknowledgment of an early retirement penalty when calculating the value of pension benefits. See Paris v. Paris, 707 So.2d 889, 890 (Fla. 5th DCA 1998)

("the Florida Supreme Court made it clear that the valuation of pension benefits must be made excluding any penalty for early retirement."), disagreed with on other grounds by Acker v. Acker, 821 So.2d 1088, 1091 (Fla. 3d DCA 2002). In adopting the reasoning of Trant v. Trant, 545 So.2d 428 (Fla. 2d DCA 1989), the Supreme Court said [b]y valuing [a] retirement plan without [an early retirement] penalty, the valuation recognizes that both parties are entitled to share in the benefits that have accrued during the marriage but which cannot be presently received without penalty. Both parties also get the benefit of the growth of that value simply because the payments are not received beginning at the time of dissolution.

Boyett v. Boyett, 703 So.2d 451, 453 (Fla. 1997).

At bar, the trial court was presented with documented evidence indicating that the former Husband's pension fund in 1990 was calculated to pay a normal annual benefit of $16,594, or to pay an early annual benefit of $10,440. The early annual benefit was calculated by multiplying by an early retirement factor of 0.62917. The former Husband argues, to no avail, that there was no reference to an early retirement penalty. Nevertheless, the $10,440¹ yearly figure is derived by applying an early retirement penalty. As such, the trial court erred by not valuing the pension benefits at their normal retirement value, excluding any penalty for early retirement.

Next, we take issue with the...