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Sala v. Sala

November 03, 2000


Before Judges Wefing, Cuff and Lefelt.

The opinion of the court was delivered by: Lefelt, J.A.D.


Argued October 16, 2000

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Hudson County, whose opinion is reported in 324 N.J. Super. 264 (Ch. Div. 1999)

Plaintiff Karleen LaSala and defendant Alfred LaSala were in the midst of a divorce proceeding when plaintiff requested equitable distribution of defendant's Police and Firemen's pension before defendant retired. The trial court divorced the parties on April 19, 1999 and directed the Board of Trustees of the Police and Firemen's Retirement System ("PFRS") to commence immediate monthly payments to plaintiff and to continue these payments for the remainder of her life or until one-half the value of defendant's pension has been paid, whichever comes first. The trial court's written decision explaining the pension distribution was published at LaSalla v. LaSalla *fn1 , 324 N.J. Super. 265, 285 (Ch. Div. 1999). PFRS now appeals, and we reverse.

Plaintiff and defendant were married on May 18, 1968. After twenty- eight years of marriage, plaintiff filed for divorce on February 14, 1996. The parties had three children, all of whom are emancipated. Defendant is fifty-three years old and is Deputy Chief of the Jersey City Fire Department. Because defendant has thirty-years of service, he is fully vested in his pension, but defendant has no present plans to retire.

Plaintiff re-entered the work force in 1984 when the parties' youngest child began attending school. Plaintiff's full time employment continued until 1994 when she lost her job due to downsizing by her employer. Since that time her employment has been sporadic and at modest compensation. Plaintiff is a high school graduate with limited job skills.

During their marriage, the parties acquired only two assets of any significance, the marital home and defendant's PFRS pension. Excluding defendant's pension, the parties' net worth is just slightly in excess of $12,000. The trial judge established $669,000 as the value of defendant's pension, as of February 14, 1996, the date plaintiff filed her divorce complaint. The value was derived from calculations used by the Division of Pensions to estimate the amount of funds that must be transferred to the retirement account when a member retires.

Because plaintiff sought, before defendant's retirement, either a lump sum or other equitable distribution of her interest in defendant's pension, the judge, upon plaintiff's motion, joined PFRS as a party to the litigation. After conducting a plenary hearing on the distribution of defendant's pension, the trial court ordered PFRS to commence monthly payments to plaintiff for the remainder of her life or until she received the maximum benefit of $334,500, one-half the value of defendant's pension. The trial court stayed its judgment, and only PFRS appealed. No party has challenged the value established for defendant's pension, though PFRS does take the position that neither defendant nor plaintiff is entitled to the present value of defendant's retirement allowance. The issue presented by this appeal, thus, is whether the trial court erred by ordering PFRS to distribute plaintiff's share of defendant's pension before defendant's retirement.

The trial court has discretion in allocating marital assets to the parties in equitable distribution. Borodinsky v. Borodinsky, 162 N.J. Super. 437, 443-44 (App. Div. 1978). We review distributions to determine whether the court has abused its discretion. Ibid. Thus, we will affirm an equitable distribution as long as the trial court could reasonably have reached its result from the evidence presented, and the award is not distorted by legal or factual mistake. Perkins v. Perkins, 159 N.J. Super. 243, 247-48 (App. Div. 1978). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty v. Township Comm., 140 N.J. 366, 378 (1995).

The trial court, in this case, was concerned that plaintiff would become destitute unless it directed the immediate distribution of plaintiff's share of defendant's pension. LaSalla, supra, 324 N.J. Super. at 285. The judge, in effect, made plaintiff "a limited member of PFRS." Id. at 284. According to the trial court, plaintiff was not entitled to a lump sum payment by PFRS, but she was entitled to make two choices: (1) "withdraw her share of the contributions[,] . . . waive the pension, . . . [and] receive only her proportionate share of the contributions made during coverture"; or (2) "receive the pension . . . payable in monthly installments [from PFRS], capped by her distributive share, $334,500." Ibid. Our problem with this result is that the trial court has granted plaintiff rights in defendant's pension that no member of PFRS enjoys.

PFRS is a pooled annuity defined benefit fund. Only a member's contributions are attributable to the member. All of the remaining assets are "pooled" for the entire system. Under the current statute, therefore, only when defendant retires will he be entitled to his pension. Until he retires, he has no present right to a retirement benefit.

Defendant's pension, until he retires, is also contingent upon separation from service and withdrawal from the retirement system. N.J.S.A. 43:16A-11 to 11.1. His pension may also be completely or partially forfeited "for misconduct occurring during the member's public service." N.J.S.A. 43:1-3b. The only immediate right defendant enjoys is the right to borrow up to one-half of his accumulated contributions to the retirement system. N.J.S.A. 43:16A-16.1. Should defendant die, there is no statutory provision to continue his benefits to his spouse. The remaining funds allocated to defendant's pension would upon his death be returned to the fund.

In 1967 the PFRS statute was significantly amended by L. 1967, c. 250, ยง 31, repealing N.J.S.A. 43:16A-12, which permitted PFRS members to elect a form of retirement that would provide a survivor annuity to a designated beneficiary. Under this form of retirement, the ...

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