On certification to the Superior Court, Appellate Division.
For reversal -- Chief Justice Wilentz, and Justices Handler, Pollock, O'Hern and Stein. Opposed -- None. The opinion of the Court was delivered by Garibaldi, J. Justice Clifford did not participate.
We hold today that the right to receive future post-retirement cost-of-living increases payable to pensioners under the New Jersey Police and Firemen's Retirement system (NJPFRS) qualifies as marital property subject to equitable distribution. The extent of inclusion of such post-retirement cost-of-living increases is limited to those attributable to the portion of the pension that was earned during the marriage.
Calvin Moore and Barbara Moore were married in December of 1961. Mr. Moore became a policeman in the City of Newark in March of 1963, which is when he enrolled in the New Jersey Police and Firemen's Retirement System. The Moores had two children.
The parties accumulated a number of assets during their marriage, including a nine-family rental property and a three-unit dwelling. They also acquired life insurance, bank accounts, and Mr. Moore's policeman's pension.
In August of 1979 Mr. Moore filed for divorce on the grounds of extreme cruelty. Mrs. Moore counter-claimed on the same grounds. The trial court rendered a Dual Judgment for Divorce. Under the judgment Mr. Moore was awarded the nine-unit property and Mrs. Moore the three-unit property. Mr. Moore was required to compensate Mrs. Moore for the difference in value between the properties. No distribution of the other assets was ordered in this judgment. The trial court, however, acknowledged that the parties agreed to divide these assets equally. Mrs. Moore was awarded custody of the two children, then ages twelve and eleven, and support and alimony; the latter consisted of payments of $30.00 per week running from August 1, 1980 to September 1, 1981.
In an order dated March 2, 1984, the trial court valued and distributed the remaining assets, including the pension. The pension was valued at $3,874.36, an amount equal to Mr. Moore's contributions to the plan during the parties' marriage.
Mrs. Moore appealed, and the Appellate Division held that in light of DiPietro v. DiPietro, 193 N.J. Super. 533 (App.Div.1984), the amount of the pension subject to equitable distribution was not limited to the amounts Mr. Moore contributed to the system. Thus, it reversed and remanded for a "valuation of the value of the pension consistent with the principles expressed in Dipietro."
On remand, the trial court and the parties referred to May 14, 1982, and May 18, 1982, expert valuation letters by Robert Davis, a consulting actuary. For purposes of his calculations Davis made assumptions regarding interest rates and mortality. He then calculated the discounted current value of the portion of the pension accruing from contributions made during the marriage of the parties. Davis stated that if Mr. Moore were to have retired after the parties' divorce but before completing twenty-five years of service, the pension would have three possible values: $21,974 without recognizing future salary or post-retirement cost-of-living increases; $47,441 recognizing future
salary increases but not future post-retirement cost-of-living increases; or $66,212 recognizing both future salary and post-retirement cost-of-living increases. Alternatively, Davis presented three additional figures to account for the possibility that Mr. Moore would complete twenty-five years of service and thereby receive a larger percentage of his average final compensation: $32,325 without recognition of future salary and post-retirement cost-of-living increases; $59,830 recognizing future salary increases but not future post-retirement cost-of-living increases; or $84,951 recognizing both future salary and post-retirement cost-of-living increases. The parties accepted the methodology and accuracy of Mr. Davis' reports.
The trial court accepted the Davis valuations and chose $59,830 as the value of the pension. The court determined that it would be too speculative to consider post-retirement cost-of-living increases since the Davis reports indicate they are not guaranteed by the retirement system but have been granted by the state outside of the system for the past ten years. Nevertheless, the trial court included future salary increases and accepted the calculation of Mr. Davis which recognized additional benefits flowing from Mr. Moore's completion of twenty-five years of service.*fn1 The trial court also ruled that "[b]ased on the history of this litigation it would be unfair to compel the plaintiff to pay one-half of $59,830 ($29,915) in a lump sum." Hence, the court allowed Mr. Moore to pay this sum over a period of time not to exceed twenty-four months. The court also held that the parties should pay their own counsel fees.
Mrs. Moore appealed on three grounds: (1) post-retirement cost-of-living increases should have been considered and the pension valued at $84,951; (2) Mr. Moore should have been
required to pay her share of the pension's value immediately; and (3) she should have received counsel fees. There was no cross-appeal. The Appellate Division affirmed, holding there was adequate credible evidence in the record to support the trial court's valuation of the pension. Further, it stated that the ultimate award, the two-year pay out and the denial of counsel fees did not constitute an abuse of discretion.
On May 24, 1988, we granted certification on the first and second issues. 111 N.J. 581 (1988).
In 1971 the Legislature enacted a law to "effectuate an equitable distribution of the property, both real and personal, which was legally and beneficially acquired' during the course of the marriage on its dissolution. N.J.S.A. 2A:34-23 (emphasis added.) A major policy consideration underlying the statute was
to right what many have felt to be a grave wrong. It gives recognition to the essential supportive role played by the wife in the home, acknowledging that as homemaker, wife and mother she should clearly be entitled to a share of family assets accumulated during the marriage. Thus the division of property is responsive to the concept that marriage is a shared enterprise, a joint undertaking, that in many ways it is akin to a partnership.
This statute, however, does not address the issue before us.*fn2
Likewise, no case in New Jersey explicitly addresses the question of whether post-retirement cost of living increases are to be included in equitable distribution awards. However, a plethora of New Jersey cases, relying on the public policy underlying the equitable distribution statute, have held that the right to receive benefits accruing to a spouse subsequent to a divorce are subject to equitable distribution if they are related to the joint efforts of the ...