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Pietro v. Pietro

Decided: January 5, 1982.

MARIE DI PIETRO, PLAINTIFF,
v.
ANTHONY DI PIETRO, DEFENDANT



Davis, J.s.c.

Davis

[183 NJSuper Page 71] This divorce action presents the question of the appropriate method for calculating the present value of a pension or profit-sharing plan which is a part of the marital estate. The wife urges application of the "total offset method." This method is based upon the economic assumption that over the long run the

rate of inflation runs parallel with and equals the rate of interest and thereby precludes the necessity of discounting to arrive at present value. There is no reported New Jersey decision which deals precisely with this question as it relates to pension or profit-sharing plans or cases involving general damages and their present value. For the reasons hereafter stated, I conclude that this method has been shown to be economically realistic and beneficial and therefore applicable in this type of case.

Wife and husband, now age 51 and 57 respectively, were married on October 2, 1948 and lived together until final separation which took place on September 26, 1979. The wife, Marie Di Pietro, sued for separate maintenance and the husband, Anthony Di Pietro, counterclaimed for divorce. There are six children of this marriage, only one of whom is a minor, who presently resides with wife. During the course of this 31-year marriage the husband was the sole income earner and the wife was the homemaker. He presently earns a net annual disposable income of approximately $17,500 and she has no employable skills and no income. She presently receives public assistance.

The only assets legally or beneficially acquired during the marriage are the marital home, a motor vehicle, household furniture and the husband's noncontributory pension plan. The parties stipulated the value, method and ratio of distribution of all items except the pension plan. It was also stipulated that the entire value of the plan, as determined by this court, is includable in the marital estate. This court is to determine the extent of the wife's participation.

I

The issue of whether the "total offset method" should be adopted when considering the value of a pension or profit-sharing plan emanated from divergent viewpoints between two actuaries. The parties accepted both actuaries as experts after appropriate voir dire.

The facts utilized by each expert were not in substantial dispute. They both utilized in their computation a male age 57, employed by Cement Masons Local Union No. 699, which had a qualified, noncontributory pension plan. Husband has been a pension plan member since August 21, 1956 and has accumulated 24.66 years of service as of June 30, 1981. His total work hours after May 1, 1970 to August 3, 1981 was 19,500. The plan entitled husband to benefits of: (a) $15 a month for each year of service up to 25 years; (b) $5.50 a month for each year of service without a maximum, and (c) $.0075 for each hour of service after May 1, 1970. The contracted entitlements multiplied by the accumulated services mentioned above provide a monthly benefit of $652 to commence at age 65. Although wife's expert erred by not including entitlement (b), the computation is necessarily as follows:

(a) $15 X 24.66 or $369.90

(b) $5.50 X 24.66 or $135.63

(c) $.0075 X 19,500 or $146.25

------

$651. ...


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