Young v. Young, Classification and Division of Firefighter's Pension

Young v. Young, 2008-CA-000845-MR

Issue:  Classification and division of firefighter’s pension plan

Published:   Affirming in Part, Reversing in Part and Remanding

County: Kenton

Husband appealed TC’s classification and division of his firefighter’s pension plan as a marital asset.  He claimed his defined benefits plan was exempt from division under KRS 61.690, that premarital contributions were improperly included in its award, and that an incorrect method was used to divide the pension.

The parties were married in 1989, separated in 2003, and a decree of dissolution of marriage was entered on December 12, 2005 reserving the issue of division of husband’s pension administered by the Kentucky Employees Retirement System (KERS).  A supplemental judgment was entered April 8, 2008 concluding the pension was a marital asset subject to division and finding the delayed division method set forth in Poe v. Poe, 711 S.W.2d 849 (Ky. App. 1986) to be the most equitable method of dividing the pension.  Wife was awarded one-half of 194/240 months of service credit as of November 2, 2007, the 20^th anniversary of husband’s participation in the plan.

Husband’s assertion that KRS 61.690 prohibited division of his pension was held to be without merit because the 2000 amendment to the statute which exempted KERS benefits from consideration as marital property was deleted in 2002 and the exemption was not in effect when the divorce was filed or on the date of dissolution.

Husband also claimed that trial court improperly included premarital contributions to the pension, but the CA found that the trial court properly deducted the 24 months of contributions prior to the marriage and the 22 months of contributions made after entry of the decree and thus was unable to conclude the trial court improperly included premarital contribution in its award.

Citing Armstrong, 34 S.W.3d at 86 (citing Clark v. Clark¸782 S.W.2d 56, 62 (Ky. App. 1990), the CA said it is clear “that pension and profit sharing plans should be valued on the date of the divorce decree.”  Since the trial court’s award incorrectly set the valuation date at November 2, 2007 (the date of husband’s twentieth anniversary of participation in the plan, this matter was reversed and remanded for entry of an award valuing the pension on December 12, 2005, the decree date and recalculation of the coverture fraction using the earlier date.

Finally, husband argued trial court erred in utilizing the delayed division method in allocating his pension benefits and should have used the net present value method.  The CA found that the trial court clearly weighed the evidence to determine the proper method of dividing the pension and there was no abuse in the exercise of its broad discretion.

Digested by Sandra G. Ragland, Diana L. Skaggs + Associates