Superior Court of New Jersey, Chancery Division, Camden County
Approved for Publication March 18, 2014.
Michael C. Morris, for plaintiff.
John M. Makowski, for defendant.
[435 N.J.Super. 286] CIVIL ACTION
The trial in the above matter commenced on June 27, 2013, and concluded July 15, 2013. Plaintiff and defendant reached agreement on many of the issues presented, including limited duration spousal support, equitable distribution of assets with the exception of defendant's pension, life insurance, income calculation for purposes of determining child support, and counsel fees. The parties previously entered into a consent order addressing custody and parenting time for their child.
[435 N.J.Super. 287] Equitable Distribution of Defendant's Pension
N.J.S.A. 2A:34-23(h) requires the court to " effectuate an equitable distribution of the property, both real and personal, which was legally and beneficially acquired by them, or either of them during the marriage..." It is undisputed that defendant participated in a Public Employees' Retirement System (" PERS" ) pension through his employment with Pine Hill Borough and later Pine Hill Borough Utilities Authority. Defendant continues to be a participant in that pension plan. A portion of the pension was earned prior to the marriage, and a portion of the pension was earned during the marriage.
Defendant first began participating in the pension plan in or about 1992. The parties were married on August 12, 2000. The complaint for divorce was filed October 25, 2012. Accordingly, the marital coverture period would be the period between August 12, 2000 and October 25, 2012.
Plaintiff at the beginning of trial asserted that the marital coverture portion of the pension should be divided equally by a Qualified Domestic Relations Order (" QDRO" ). She also asserted that defendant should be required to designate her as a survivor beneficiary under retirement option 4, which would provide her with a continuing benefit upon defendant's death. She argues that she should not be required to compensate defendant for any reduction in his pension resulting from her being designated as a survivor beneficiary.
Plaintiff in her written closing submission changed her position and now asserts that the court should follow the immediate offset method described in Moore v. Moore, 114 N.J. 147, 553 A.2d 20 (1989), and award her a cash payment for the present value of the pension, which plaintiff asserts would entitle her to a present value payment of $56,496.04, representing the pretax present value. Plaintiff proposes that this sum be paid by awarding plaintiff the [435 N.J.Super. 288] full Variable Annuity Life Insurance Company (" VALIC" ) deferred compensation account, which includes defendant's interest, and then awarding plaintiff additional weekly payments for the remaining asserted present value of the PERS pension. Plaintiff proposes that the remaining payments commence at the conclusion of the term for the payment of limited duration alimony.
Defendant concedes that plaintiff is entitled to receive equitable distribution of that portion of his PERS pension and deferred compensation plan accumulated during the marriage. He objects to plaintiff's request that he be required to select a survivor benefit for plaintiff, which would reduce the amount of the pension defendant would receive upon retirement. He seeks to have the pension distributed utilizing the deferred distribution method. He asserts that he does not have assets to provide a present value offset distribution.
Plaintiff in her testimony asserted she was seeking deferred distribution of the PERS pension together with survivor benefits. She provided no further testimony to explain the reason for this request. Defendant testified that he cannot afford a reduction in his total pension benefit anticipated, and that such a reduction would negatively impact his standard of living and ability to pay his bills when retired. He claims to have been saving since the early 1990's for retirement. His current plan is to work until age sixty-five.
Lois Fried, a certified public accountant, testified via telephone by consent of the parties. She stated that defendant had contributed $31,130.18 into the retirement system as of the date of valuation. Her report was based upon emails from counsel, which requested valuation of the pension under specific factual [435 N.J.Super. 289] parameters. She based her valuation on the assumption that defendant would retire at the age of sixty and begin to receive his pension benefit at that age. There was no testimony during the trial, however, which would allow the court to conclude that there is a likelihood that this is an appropriate age of retirement at which to value the pension. Defendant testified that his current plan is to retire at age sixty-five. Plaintiff provided no testimony indicating that there were
any discussions during the marriage which would suggest likely retirement at a different age.
Present valuation of the pension is relevant only where the court determines that a present value distribution of the pension is appropriate. Claffey v. Claffey, 360 N.J.Super. 240, 256, 822 A.2d 630 (App.Div. 2003); Risoldi v. Risoldi, 320 N.J.Super. 524, 540, 727 A.2d 1038 (App.Div.) certif. denied ,161 N.J. 335, 736 A.2d 528 (1999). Where the court elects to utilize the ...