The issue in this case is the eligibility for equitable distribution of an alternate death benefit payable, should an employee die before he retires, from the employee's pension reserve. On motion for summary judgment, plaintiff seeks a ruling that the benefit payable from his pension reserve in the event of his death is not an asset subject to equitable distribution. This question has not been decided previously in this jurisdiction.
The facts are not in dispute. Joseph and Barbara Corrigan were married in November 1950 and separated in December 1975. Complaint for divorce was filed on or about June 22, 1977. Subsequent to the marriage Joseph commenced employment with the Port Authority of New York and New Jersey, and continues working there to this date. Having been employed for more than 20 years by the Port Authority, he is fully eligible to collect benefits under his pension plan should he retire. An additional feature of Joseph's plan is that an alternate death benefit is provided for in an amount equal to the pension reserve which would have been established had Joseph retired on the date of death. Here the amount of the reserve fund which would act as a death benefit should Joseph die before retirement approximates $157,000. Of this fund the greatest part of it,
some $151,000, was contributed by his employer. Joseph has the power to nominate the beneficiary, and did appoint his two adult sons as beneficiaries after his separation from Barbara.
Both parties agree that under governing case law Joseph's interest in the retirement provisions of the pension plan is subject to equitable distribution. Kruger v. Kruger , 73 N.J. 464 (1977); McGrew v. McGrew , 151 N.J. Super. 515 (App. Div. 1977). They disagree sharply, however, on whether the alternate death benefit provision of the same plan is also subject to equitable distribution.
Joseph essentially argues that since the alternate death benefit can never be "acquired" within the meaning of the equitable distribution statute, N.J.S.A. 2A:34-23, it is not subject to division. Defendant Barbara, on the other hand, contends that Joseph's rights under the retirement program should be viewed as a bundle of property rights acquired during the marriage, and that there is no equitable basis for limiting Barbara to a portion of a retirement allowance. Further, both parties claim that several California cases dealing with this subject support their respective viewpoints.
In California death benefits connected to pension plans apparently are excluded from consideration as community property. In re Bruegl , 47 Cal. App. 3d 201, 120 Cal. Rptr. 597, 600 (D. Ct. App. 1975); In re Peterson , 41 Cal. App. 3d 642, 115 Cal. Rptr. 184, 191-94 (D. Ct. App. 1974); see Benson v. Los Angeles , 60 Cal. 2d 355, 33 Cal. Rptr. 257, 384 P. 2d 649 (Sup. Ct. 1963); see also, Waite v. Waite , 6 Cal. 3d 461, 99 Cal. Rptr. 325, 331, 332 n. 6, 492 P. 2d 13, 19, 20 n. 6 (Sup. Ct. 1972); Phillipson v. Board of Administration , 3 Cal. 3d 32, 89 Cal. Rptr. 61, 67-68, 473 P. 2d 765, 771-772 (Sup. Ct. 1970). The rule, however, has been criticized strongly, In re Peterson, supra , 115 Cal. Rptr. at 194, and it is open to debate whether the decision in In re Brown , 15 Cal. 3d 838, 126 Cal. Rptr. 633, 544 P. 2d 561 (Sup. Ct. 1976), overruled sub silentio the exclusion of pension death benefits from community property. See 126
Cal. Rptr. at 641 and n. 14, 544 P. 2d at 569 and n. 14. After examination of the cases, one can only conclude that California's position on this precise issue is presently murky.
It is far more expeditious for the court to concentrate on New Jersey's law to arrive at a decision. In connection with this, Barbara argues that McGrew v. McGrew , 151 N.J. Super. 515 (App. Div. 1977), controls the matter before the court. In McGrew the employee, although still working, was capable of retiring and receiving pension benefits at any time. At issue was whether, due to continued employment, the uncertainty of "when or whether the retirement benefits will be enjoyed" should defeat equitable distribution. The court found the retirement benefits includable, stating that "the consideration critical to the issue of distribution is the extent to which the anticipated benefits will have been generated by the mutual effort of the parties," rather than the likelihood of the enjoyment of those benefits. At 518. Barbara contends that this rationale compels distribution of Joseph's death benefit since that also exists through the joint efforts of husband and wife. However, equally "critical" to the issue of distribution, as the McGrew court recognized, is "the nature of the interest and defendant's control over it." McGrew, supra at 518, quoting from Blitt v. Blitt , 139 N.J. Super. 213, 218 (Ch. Div. 1976). What, then, constitutes control under N.J.S.A. 2A:34-23, the equitable distribution statute, and what interests qualify for distribution?*fn1
The relevant part of N.J.S.A. 2A:34-23 permits a trial court "to effectuate an equitable distribution of property, both real and personal, which was legally and beneficially acquired * * * during the marriage." As put by Judge Seidman, "[i]t is readily evident that the key words to be considered are 'property,' 'acquired,' and 'legally and beneficially,' as they are used in the context of ...