The opinion of the court was delivered by: Parker
The evidence in this case indicates that the parties were married on July 10, 1965. The jurisdiction and venue requirements for the divorce were met and the grounds for extreme cruelty were satisfactorily proven.
Two children were born of the marriage: Brian, on August 2, 1972, and Laura, on November 1979. Brian is now 22 years old and emancipated. The parties stipulated that they will havejoint custody of Laura; defendant will have physical custody. Plaintiff will arrange visitation with Laura directly.
In October 1991, a domestic violence final restraining order was entered under Docket Number FV-19-046-92. The restraints will be continued but all other provisions of the restraining order will be superseded by the judgment of divorce.
The issues tried to the court were: alimony; child support, college costs and medical expenses for Laura; equitable distribution of personal property, income taxes paid and retirement benefits; and counsel fees.
[PARTS OF THIS OPINION PERTAINING TO ALIMONY, CHILD SUPPORT, COLLEGE COSTS, MEDICAL EXPENSES AND EQUITABLE DISTRIBUTION WERE DECIDED IN ACCORDANCE WITH ESTABLISHED LAW AND ARE NOT INCLUDED IN THE PUBLISHED OPINION.]
A novel issue is presented here: whether a federal employee who has not contributed to social security insurance is entitled to an offset against his pension for a spouse's social security benefits. Defendant participated in the federal employees pension system under Chapter 83, 5 U.S.C. Section 8300-8351, Federal employees participating in the Chapter 83 pension plan do not participate in the social security system. Plaintiff has no pension and the only retirement benefit to which she will be entitled will be social security.
Defendant's expert, William M. Troyan, reported that the present value of defendant's pension was $725,374.33 and the present cash value of the marital portion of plaintiff's social security benefit was $94,500.82. Defendant's pension includes his military service prior to the marriage. The application of thecoverture fraction, *fn1 however, will adjust the pension to the years of the marriage. Given the duration of this marriage and plaintiff's, contribution, both financially and as the principal homemaker and child care provider, the pension will be distributed equally between the parties. There are insufficient assets against which to offset defendant's pension for immediate distribution, requiring a deferred distribution of the retirement benefits. Whitfield v. Whitfield, 222 N.J. Super. 36, 535 A.2d 986 (App. Div. 1987).
Defendant's pension is a defined benefit plan for which the benefit will be determined on the date of defendant's retirement. Plaintiff's share, subject to the coverture fraction, will be calculated on the same date. Marx v. Marx, 265 N.J. Super. 418, 627 A.2d 691 (Ch. Div. 1993). The marital portion of a federal pension is distributed by way of a Court Order Approved for Processing (COAP) which must be drafted in accordance with the Code of Federal Regulations. Social security benefits are not ordinarily subject to equitable distribution. Hipsley v. Hipsley, 161 N.J. Super. 119, 390 A.2d 1220 (Ch. Div. 1978). Defendant argues, however, that because he is not entitled to receive social security under his federal pension, plaintiff's share of his pension should be offset for 50% of plaintiff's social security benefit. Moreover, defendant seeks to have plaintiff's social security benefit offset against his pension immediately upon his retirement. There are two questions to be determined here: whether defendant is entitled to an offset for plaintiff's social security and, assuming he is, whether an immediate offset is fair and equitable under the circumstances. Our research indicates there is no New Jersey case law addressing this issue. We look to other states for guidance.
In Smith v. Smith, 91 Ohio App. 3d 248, 632 N.E.2d 555, 560 (Ohio Ct. App. 1993), the Ohio Court of Appeals determined that social security benefits should be offset against a public employee's pension:
Social security, while not a divisible marital asset, must be considered when equitably allocating pension benefits. This is particularly important in the division of a PERS [Public Employment Retirement System] account. For, in general, participation in PERS exempts an employee from taxes imposed by the Federal Insurance Contributions Act. . . and the Social Security Act. . . . While a public employee is not subject to social security taxes, neither does a public employee build credit in the social security program during his tenure in exempt public service. . . . Under the circumstances, an equitable distribution of pension benefits can be accomplished by offsetting plaintiff's ...