Tubbs v. STATE EX REL TEACHERS'RETIREMENT SYSTEM, 95,968.
| Decision Date | 15 October 2002 |
| Docket Number | No. 95,968.,95,968. |
| Citation | 57 P.3d 571,2002 OK 79 |
| Parties | Melvin L. TUBBS, Plaintiff/Appellant, v. STATE of Oklahoma, ex rel., The TEACHERS' RETIREMENT SYSTEM OF OKLAHOMA, Defendant/Appellee. |
| Court | Oklahoma Supreme Court |
Joe B. Reeves, Lawton, for Appellant.
John McCormick, Asst. Attorney General, Oklahoma City, for Appellee.
Lydia Lee, Oklahoma City, for Amicus Curiae, Oklahoma Public Employees Retirement System.
¶ 1 The plaintiff, Tubbs, retired as a school teacher and subsequently was divorced. In dividing the marital property the divorce court entered an order concerning Tubbs' retirement benefits that the Teachers' Retirement System declined to follow. He appealed to the District Court of Oklahoma County, which affirmed the Board's order, and then appealed to this Court. We conclude that the Teachers' Retirement System erred in not following the divorce court's order, and direct that the District Court render judgment for Tubbs upon remand.
¶ 2 Tubbs' career with the Lawton Public Schools lasted from August 1967 until May 1996. He was a member of the Oklahoma Teachers' Retirement System. He married in 1989, and upon his retirement in 1996 he named his wife as beneficiary of certain retirement benefits. By designating his wife as a beneficiary the sum of $107.04 per month was deducted from his monthly retirement benefit.
¶ 3 Tubbs and his wife were divorced by a decree of the District Court of Comanche County on March 3, 2000.1 That decree included the following award to Tubbs:
All right title and interest in and to plaintiff's retirement and pension benefits from the Oklahoma State Teachers Retirement System; and provided further that any survivor benefits previously designated for the defendant are hereby terminated by this decree under the provisions of 15 O.S. 178(A) and Oklahoma Retirement System Rule 715:10-9-7;
A few weeks after the decree the District Court of Comanche County issued "a qualified domestic order."2 The order included the following:
The Member is awarded all right, title and interest in and to member's retirement and pension benefits from the Oklahoma State Teachers Retirement System and all benefits previously designated for the defendant are hereby terminated under the provisions of 15 O.S. 178(A) and Oklahoma Teacher Retirement System Rule 715:10-9-7 and § 17-109(B)(5)(c).
The Teachers' Retirement System (TRS), through its Executive Secretary, declined to follow the order of the District Court. Tubbs protested the decision and requested a hearing.
¶ 4 The hearing officer issued proposed findings of fact and conclusions of law.3 He concluded that a "death benefit" could be changed by Tubbs or the District Court, but that "survivor benefits" to be paid in the future to Tubbs' spouse during her life in the event he predeceased her could not be altered by the District Court. In September of 2000 a hearing was held before the Board of Trustees of the Teachers' Retirement System where the Board accepted the hearing officer's proposed findings and conclusions.
¶ 5 Tubbs then appealed the decision of the Board to the District Court of Oklahoma County. The District Court found no error in the administrative proceedings, and issued an order affirming the order of the Board of Trustees. Tubbs appealed the order of the District Court to this Court, and we retained the appeal.
¶ 6 The parties in effect urge and counter-urge two propositions. The first would have us determine whether a statute enacted in 1987, 15 O.S.1991 § 178(A) causes or does not cause certain Teachers' Retirement benefits to be extinguished in the event of divorce. The second is whether a district court has the power to award the value of a spouse's survivor's annuity benefit to the other spouse, a member of the Teachers' Retirement System, in a divorce. We answer the second proposition in the affirmative. For that reason, we need not concern ourselves further with the applicability of section 178(A), and whether it applies in the absence of the death of the party to a contract providing death benefits.4
¶ 7 In May of 1996 when Tubbs retired he was required to select one of five retirement plans. They were: The Maximum Retirement Plan, Retirement Option 1, Retirement Option 2, Retirement Option 3, or Retirement Option 4.5 Two of these plans, "Option 2" and "Option 3" provide for monthly benefits payable to the spouse of the retired member after the member dies. O.A.C. 715:10-15-10(3),(4) (1996). When a member of the retirement system retires and does not select either Option 2 or Option 3, and the member is married, the member's spouse must consent to the retirement option selected by the member.6 Upon retirement Tubbs selected Option 3, and his wife obtained a survivor's benefit.
¶ 8 The value of the survivor's benefit in the Teachers' Retirement System is capable of calculation when the teacher retires. Indeed, the System is required to make this calculation when determining the amount subtracted from the member's monthly benefit for the purpose of funding the survivor's benefit for an Option 3 plan.
Thus, after the member's retirement the member's spouse possesses an easily identifiable and calculable economic interest in the member's Option 3 plan. Is the survivor's interest a type of property that a district court may divide between the parties to a divorce? We believe it is, as we now explain.
¶ 9 A district court possesses power in a divorce proceeding to divide the marital estate. Larman v. Larman, 1999 OK 83, ¶ 17, 991 P.2d 536. Generally, a pension right burdened with a conjugal interest is a type of marital asset divided between the parties to a divorce. Thielenhaus v. Thielenhaus, 1995 OK 5, 890 P.2d 925, 931. We have said that "absent a specific statutory exception ... a trial court may consider the pension as jointly acquired, make a grant of that property to one spouse and then make a compensating award to the other spouse." Rice v. Rice, 762 P.2d, 925, 926-927. In Rice we affirmed that part of the divorce decree that awarded a retired police officer his retirement funds and a cash award to the wife to offset the value of her interest in the pension. Further, it is not uncommon for a pension or retirement plan to provide for benefits to a survivor. See, e.g., Pulliam v. Pulliam, 1990 OK 71, ¶¶ 6-7, 796 P.2d 623, 624, (plan included survivor's benefits).
¶ 10 The Teachers' Retirement System relies upon Ozment v. Ozment, 2000 OK CIV APP 52, 11 P.3d 635, for the proposition that a retiree's selection of a retirement option cannot be altered by a divorce proceeding because that selection is irrevocable. Ozment is a non-precedential opinion7 and does not address a divorce decree after retirement. The argument made by the Teachers' Retirement System based on Ozment is essentially thus:
The Retirement System would equate a retiree's power to elect an option with a district court's power to make division of marital property. With this we do not agree, as will be explained.
¶ 11 The statutory authority, 70 O.S.Supp. 1999 § 17-109, states that a district court may issue a qualified domestic order. A qualified domestic order for the purpose of the Teachers' Retirement System is:
... an order issued by a district court of this state pursuant to the domestic relation laws of the State of Oklahoma which relates to the provision of marital property rights to a spouse or former spouse of a member or provision of support for a minor child or children and which creates or recognizes the existence of the right of an alternate payee, or assigns to an alternate payee the right, to receive a portion of the benefits payable with respect to a member of the Retirement System."
70 O.S.Supp.1999 § 17-109(B)(2), emphasis added.8
Thus a district court has the authority to determine the payees of the retirement benefit, regardless of whether the non-member spouse is listed as a payee in a particular retirement option.
¶ 12 Whenever a divorce occurs, either before or after retirement, a district court possesses the power to award the respective spouses the property to which each of them is entitled. Pension benefits accumulated during the marriage as jointly acquired property are subject to equitable division in a divorce. Jackson v. Jackson, 2002 OK 25, ¶ 13, 45 P.3d 418, 426. Property rights held by both the member and the member's spouse are not destroyed by the retirement of the member. Of course, after retirement the nature of the property interest is different,9 but that difference does not limit a district court in awarding each spouse his or her equitable share of the retirement benefit.
70 O.S.Supp.1995 § 17-109(6)(a) & (b).
The Teachers'...
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