Wyzard v. Wyzard

BAKER, J.

dissenting.

I respectfully dissent and part ways with the majority's decision to reverse this case because the trial court valued Joe's pension at $32,409.53. Although the trial court did not value Joe's pension plan within the range of the parties' expert testimony, the record shows that the trial court considered the amount of non-forfei-table funds and essentially awarded Bobbie a share of those benefits even though Joe would not be entitled to them in a lump sum at present, and would not be automatically entitled to those funds at the time of retirement. Thus, I cannot agree that there was an "absence of any evidence to support the valuation." Slip op. at 757.

In considering the final distribution of the property, the trial court also considered Joe's intention to continue working for at least five years. Appellee's App. p. 1. Also, as the majority acknowledges, the trial court properly determined that the benefits under the Fund were exempt from attachment, garnishment and judicial process. Joe could not transfer, assign or sell those benefits, and there was no pre-retirement survivor benefit annuity in the event that Joe died before retirement. The evidence also showed that while Joe was entitled to receive social security benefits from his part-time job at the print shop, he was ineligible to receive such benefits from the fire department upon retirement.

Inasmuch as Indiana has not squarely addressed the issue presented here regarding entitlement to social security benefits, a number of jurisdictions have recognized that, under certain cireumstances, a trial court may consider reducing the present value of a pension by the amount that a person would have received under Social Security benefits as if the party had participated and contributed to that program.

For instance, in White v. White, 284 N.J.Super. 300 , 664 A.2d 1297, 1298 (1995), *759 the Superior Court of New Jersey considered whether a federal employee who did not contribute to social security insurance was entitled to an offset against the value of his pension for a spouse's social security benefits. Id. at 1298. It was shown that the wife had no pension and the only retirement benefit to which she was entitled was social security. Id. In permitting the offset of the pension's value by the amount of social security benefits, the court noted:

Defendant's non-participation in Social Security enabled the parties to. enjoy a greater disposable income during the marriage.... When the Plaintiff retires, however, she will have the additional advantage of Social Security. Since Plaintiff contributed to Social: Security during the marriage, Defendant is entitled to share in the coverture portion of her Social Security benefit.

Id. Along these same lines, in Walker v. Walker, 112 Ohio App.3d 90 , 677 N.E.2d 1252 (1996), the husband was a long-time employee of the United States Postal Service and participated in its pension plan. The plan effectively took the place of both a private pension plan and Social Security. Neither the husband nor the postal service contributed to the social security system. At trial, it was established that if the husband had contributed to Social Security during the marriage, the present value of the benefits would have amounted to over $86,000. Id. The referee at the hearing deducted that present value from the marital portion of the husband's pension plan. Id. On appeal, the court rejected the wife's argument that it was improper to consider the husband's hypothetical social security credits as marital property. Id. In affirming the lower court's judgment, the Walker court observed:

Public employees who do not participate in the Social Security system may be penalized because the portions of their pension equivalent to Social Security contributions are marital property subject to division, while their spouse's contributions to Social Security cannot. be considered marital properfy under federal statute.

Id. at 1253. The court went on to note that:

[WJhile Social Security benefits are not true marital asserts and are not "subject to direct division," they are "subject to evaluation and consideration in making an equitable distribution of both parties' marital assets."

Id. Finally, it was concluded that:

The court's division of defendant's retirement benefits did not constitute an abuse of discretion, as it exhibited a sound reasoning process by considering the equivalent of his Social Security benefits, by determining the present value of the marital portion of these benefits by expert testimony, and then by deducting this present value from the marital portion of defendant's pension plan.

Id. at 1254.

Considering such rationales as applied to the cireumstances here, the parties agree that Joe would not receive social security benefits under the Fund. I acknowledge that benefits which cannot presently be withdrawn and are not vested cannot be considered for division in a dissolution action. Axsom v. Axsom, 565 N.E.2d 1097, 1100 (Ind.Ct.App.1991). However, this court has determined that certain types of property where one may not have any present possessory interest may be considered relevant to the parties' earning abilities or economic circumstances.. See In re Marriage of Bartley, 712 N.E.2d 537, 545 (Ind.Ct.App.1999). Thus, as recognized by our colleagues in Ohio, it is apparent to me that future payment of social security benefits should be subject to a trial court's evaluation *760 when considering the distribution of the marital assets in an equitable fashion.

In a similar vein, I am reluctant to impose high burdens on litigants in dissolution actions in cireumstances such as these to require a specific articulation of values by experts with regard to certain marital assets. Such exactitude should not be required, inasmuch as it is the overall distribution of the assets that is relevant-not the valuation of a single asset or benefit.

I would note here that testimony was presented at the final hearing regarding the mortality rate of firefighters. Joe's expert, Lewis Reynolds, testified that he has read studies that indicate there is a higher propensity for coronary artery disease and other cireumstances that are tied to a firefighter's vocation. It was agreed that Joe's estate might receive only $32,-0000. Appellant's App. p. 57, 73. Moreover, it was established that Joe could not transfer his pension under the Fund to his heirs or a subsequent spouse as in the case of a typical pension.

Bobbie, however, could designate a beneficiary for her retirement benefits without fear that her heirs would receive no benefit of those funds. She also has social security benefits that provide monthly survivor benefits for a spouse in the event that she might remarry at a future date. Both parties recognized that the Fund was not subject to a Qualified Domestic Relations Order, Appellee's App. p. 7, and the only value that Joe would receive might be the value of his own contributions at the time of his death.

Given such evidence, it is apparent to me that the trial court determined, based upon the totality of the cireumstances, that a 50-50 division of the property between the parties was not appropriate. Rather, Bobbie was awarded 63% of the marital property and was entitled to receive accrued social security benefits. On the other hand, Joe was awarded 37% of the property and was eligible to receive his pension benefits. Therefore, I would hold that the trial court's decision not to include the valuation of Joe's pension, other than the amount of contributions that he paid into the Fund, does not amount to an abuse of discretion. The trial court's findings, as they relate to the pension, demonstrate that the only portion of the pension that Joe was entitled to regardless of his death, was properly considered. Thus, it is my view that the trial court's award to Joe of his firefighter pension under the Fund, in light of his ineligibility for social security benefits for his service as a firefighter, was not erroneous. I would affirm the trial court's judgment.