In re Marriage of Richardson

SECOND DIVISION
March 4, 2008
No. 1-07-1201
In re MARRIAGE OF ) Appeal from the
) Circuit Court of
PAUL D. RICHARDSON, ) Cook County
)
Petitioner-Appellant, )
) No. 92 D 18312
and )
)
PATRICIA KENNEDY RICHARDSON, ) Honorable
) Raul Vega,
Respondent-Appellee. ) Judge Presiding.
JUSTICE KARNEZIS delivered the opinion of the court:
Petitioner Paul Richardson and respondent Patricia Kennedy Richardson were
divorced in 1995 after 10 years of marriage. Pursuant to the terms of the parties'
settlement agreement, the judgment of dissolution of marriage awarded respondent
one-half of petitioner's pension "as it has accrued" from the date of the marriage to the
date of the dissolution judgement. Petitioner, a police officer, accrued pension benefits
in the Village of Hoffman Estates Police Pension Fund from 1973 until his retirement in
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2002. In March 2007, the court apportioned the pension benefits, ordering petitioner to
pay respondent $1,112.67 per month as her half share of the marital portion of
petitioner's monthly pension benefit, pay her any arrearage due on her share and "pass
along" to respondent any 3% cost of living benefit increases when he received them.
Petitioner appeals, arguing the court erred in apportioning his pension benefits
because (1) its benefit calculation violates the language of the settlement agreement
and (2) respondent should not receive the "full" 3% cost of living increases. We affirm,
but remand for correction of the order.
Background
Petitioner started participating in the pension plan when he was hired by the
Village of Hoffman Estates police department on October 12, 1973. He married
respondent on June 14, 1984. The court entered the dissolution of marriage order on
March 27, 1995. Pursuant to the terms of the parties' oral settlement agreement, the
judgment of dissolution of marriage provided:
"Wife is hereby awarded one-half (1/2) of Husband's pension as it has accrued
form [sic] the date of the marriage to the date of the entry of this Judgment of
Dissolution of Marriage. This court shall retain jurisdiction of this cause for the
purpose of entering a Qualified Domestic Relations Order."
In December 2002, petitioner retired and started collecting his benefits.
Pursuant to the Illinois Pension Code (40 ILCS 5/3-111 (West 2006)), for service
in excess of 20 years, a pension is calculated at 50% of the employee's final salary,
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plus an additional 2.5% of salary for each full year of service up to 30 years. Petitioner
worked 29 full years. His yearly benefit was, therefore, calculated at 72.5% of his final
salary, for a monthly benefit of $6,012.83 gross. This amount is uncontested.
In September 2003, petitioner started paying respondent what he considered her
share of the benefits, admittedly guessing at the amount. He contacted the pension
fund requesting a calculation of how much he should be paying respondent. The fund
informed him he should be paying respondent $625.40 per month, and petitioner
started remitting that amount in December 2003, plus additional sums to cover the
arrearage due to his failure to pay this monthly sum as of the date he started collecting
his pension in December 2002.
In July 2003, respondent moved for compliance with the judgment for dissolution
and requested the court order petitioner to consent to having respondent's share of the
pension remitted directly to her by the pension fund through a qualified domestic
relations Order. When the court dismissed her motion, respondent filed a rule to show
cause and other relief, asserting petitioner's calculation of respondent's share of the
pension was incorrect and requesting a judgment for the correct monthly amount and
payment of any arrearage. She subsequently filed a petition for modification or
clarification of the judgment of dissolution, requesting the court determine the exact
amount she should be receiving as her half share of the marital portion of the pension.
Respondent asserted her half share of the marital portion of petitioner's pension
should be either $1,118.44 or $1,112.67 per month, depending on which of the two
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allocation formulas suggested by her expert applied, plus her share of the 3% cost of
living increases petitioner would receive annually starting in January 2005. Petitioner
responded that respondent's half share of the marital portion of his pension should be
$625.40 per month, asserting respondent should not receive the benefit of the years he
worked before and after the divorce.
At the hearing, it was uncontested that the parties' intent was that respondent
receive 50% of the marital portion of petitioner's pension. However, the parties did not
agree on how to calculate the marital portion and presented testimony by pension
valuation experts to support their respective benefit calculations. Both parties' experts
agreed that petitioner's pension plan was a "defined benefit plan," whereunder the
value of the benefit is determined at retirement based on years of service and final
salary. It was not a "defined contribution plan," where the value of the pension is
based on contribution/deposits made to the plan and investment risk and can be
determined before retirement. Under the terms of the pension plan, petitioner's
benefits had not vested or matured at the time of dissolution. Petitioner had neither the
age nor the years of participation in the plan to be able to collect his pension on the
date of dissolution. Further, if petitioner died before he started collecting his pension,
neither he nor respondent would collect any benefits.
Respondent's expert suggested two approaches to determining the marital
portion of the pension: the subtraction approach and the reserved jurisdiction
approach. Using the subtraction approach, she determined respondent's half share of
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the marital portion of the pension to be $1,118.44 per month. She reached this
conclusion by, as she explained, interpreting the allocation provision in the judgment
for dissolution to require subtracting the benefit petitioner had accrued by the date of
the marriage from the benefit petitioner had accrued by the date of the dissolution in
order to determine the increase in petitioner's benefit accrued from the date of the
marriage to the date of the dissolution, of which respondent would be awarded a half
share, $1,118.44 per month.1
Using the reserved jurisdiction approach, also called the fractional approach,
she calculated respondent's half share of the marital portion would be $1,112.67 per
month. To determine the marital portion of the pension, she divided the length of time
petitioner accrued benefits during the marriage (129.38 months) by the total length of
1
Respondent's expert obtained from the pension board calculations of the
benefit petitioner had accrued on both the date of the marriage ($389.78 per month)
and the date of the dissolution ($2,626.66 per month). These amounts were the
benefits he would receive on those two dates, calculated using the benefit formulas
applicable at those two times, the varying salaries applicable at those times and
necessarily assuming he was eligible to collect his pension then. Respondent's expert
calculated the increase in petitioner's benefit between the date of marriage and the
date of dissolution as: $2,626.66 - $389.78 = $2,236.88 per month, of which
respondent would receive one-half, or $1,118.44 per month.
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time petitioner accrued pension benefits before his retirement (349.60 months), and
concluded it to be 37.01%. She then determined the value of the marital portion of
petitioner's pension benefit by taking the marital 37.01% of the $6,012.83 monthly
benefit the parties agree petitioner received upon retirement in December 2002:
37.01% x $6,012.83 = $2,225.35 per month, of which respondent would be awarded a
one-half share: $1,112.67 per month.
Petitioner's expert, the actuary for the Village of Hoffman Estates and the
pension fund, determined respondent's half share of the marital portion of the pension
to be $625.40 per month. Because petitioner had accrued 10 full years of benefit
during the term of the marriage by the date of dissolution in 1995, his expert calculated
the marital portion of the pension by using the provision in the Pension Code applicable
in 1995 for service of less than 20 years, pursuant to which a police officer would
receive 2.5% of his or her salary for every full year of service. He, therefore, calculated
the marital portion of the pension as 25% (2.5% for each of the 10 years of service
during the marriage) of the $60,037.90 salary petitioner was receiving at the time of the
dissolution in March 1995. Respondent's half share of this marital portion would be
$625.40 per month. Petitioner's expert stated he did not consider petitioner's income at
the time of retirement in December 2002 because he was only asked to calculate the
value of the benefit at the time of the dissolution.
Respondent's expert testified petitioner's expert's calculation was wrong
because it was based on petitioner's salary at the time of the dissolution, which she
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stated was completely irrelevant in determining his final pension benefit. She
explained that, pursuant to the terms of the defined benefit plan, all years in the plan
are counted at the same salary: the salary petitioner was receiving at the time he
retired. The plan would pay the same benefit for each of the 10 years petitioner
accrued benefits while married as for the years he accrued benefits before and after
the marriage. She testified the greater value of the pension now would not be possible
without the earlier years' contributions and that no single year's contribution was more
valuable than any other year's. Both experts agreed that the annual 3% cost of living
increases petitioner would receive starting in January 2005 were not earned benefits
resulting from petitioner's service as a police officer and he would get them annually no
matter how many years he participated in the pension plan.
On March 29, 2007, the court found that petitioner was not in indirect civil
contempt for failing to follow the judgment for dissolution of marriage because the
amount due respondent was not clear or determined. It held that petitioner's pension
plan was a defined benefit plan, its value could not be determined at the time of the
divorce and respondent received no offset toward the pension benefits at the time of
the divorce. The court found respondent's expert convincing and her use of the
"reserved jurisdiction" method to compute respondent's share of the pension to be
within case law and correct. It accepted the expert's calculation and ordered petitioner
to pay respondent $1,112.67 per month as her share of the pension benefit, to "pass
along the 3% cost of living increases whenever he receives them" and to pay
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respondent any arrearage based on the court's calculations. Petitioner timely
appealed.
Analysis
Petitioner argues the court erred in using the "reserved jurisdiction" approach
advocated by respondent's expert to calculate the marital portion of the pension,
asserting that this approach violates the plain language of the parties' settlement
agreement incorporated in the judgment for dissolution of marriage. "[P]ension benefits
earned during the marriage are considered marital property and, upon dissolution, are
subject to division like any other property." In re Marriage of Menken, 334 Ill. App. 3d
531, 533, 778 N.E.2d 281, 283 (2002); 750 ILCS 5/503(b)(2) (West 2006). To that end,
the 1995 judgment for dissolution provided:
"Wife is hereby awarded one-half (1/2) of Husband's pension as it has accrued
form [sic] the date of the marriage to the date of the entry of this Judgment of
Dissolution of Marriage. This court shall retain jurisdiction of this cause for the
purpose of entering a Qualified Domestic Relations Order."
In 2007, the court used the reserved jurisdiction approach to determine respondent's
share of the marital portion of petitioner's pension to be $1,112.67 per month.
The reserved jurisdiction approach, originally set out in In re Marriage of Hunt,
78 Ill. App. 3d 653, 397 N.E.2d 511 (1979), is a formula widely accepted by Illinois
courts in allocating the division of unmatured pension interests. In re Marriage of
Wisniewski, 286 Ill. App. 3d 236, 241, 675 N.E.2d 1362, 1366 (1997); In re Marriage of
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Sawicki, 346 Ill. App. 3d 1107, 1115, 806 N.E.2d 701, 708 (2004); Robinson v.
Robinson, 146 Ill. App. 3d 474, 476, 497 N.E.2d 140, 142 (1986). Under this approach,
the marital interest in a pension benefit is determined by dividing the number of years
or months of marriage during which pension benefits accumulated by the total number
of years or months benefits accumulated prior to retirement or being paid. Hunt, 78 Ill.
App. 3d at 663, 397 N.E.2d at 519; Wisniewski, 286 Ill. App. 3d at 240, 675 N.E.2d at
1366 (referring to the Hunt formula as the "proportionality rule"). The value of the
marital interest is then calculated by multiplying the amount of each benefit payment as
it is disbursed by the marital interest percentage. Hunt, 78 Ill. App. 3d at 663, 397
N.E.2d at 519; Robinson, 146 Ill. App. 3d at 476, 497 N.E.2d at 142. Using this
formula, respondent's expert determined the value of the marital interest in petitioner's
pension benefit to be 37.01% of petitioner's monthly $6,012.83 benefit at retirement, or
$2,225.35 per month, of which respondent would receive one-half, or $1,112.67 per
month. The court accepted this as the correct allocation of the marital portion of
petitioner's pension.
Petitioner first asserts the court had no authority to make a decision as to how
the pension should be distributed at the time petitioner retired because that decision
had already been made in the judgment for dissolution, that the method of calculation
was set forth in the judgment and the court confused its jurisdiction regarding the time
of payment with its jurisdiction to calculate the payment to be made. We disagree.
The judgment did not set out the exact allocation of the marital portion of the
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pension. All the judgment provided was that respondent was awarded one-half of
petitioner's pension as it had accrued from the date of the marriage to the date of the
entry of the dissolution judgment. The period of time from the date of marriage to the
date of dissolution is the period of time of a marriage. The marital portion of any asset
is that portion of the asset accrued during the period of time of a marriage.
Accordingly, the judgment sets forth nothing more than that respondent was awarded
one-half of the marital portion of the pension, which, as petitioner acknowledged at trial,
was the intent of the agreement. It does not set forth how that marital portion will be
calculated, nor the value of the portion of the pension in which respondent was
awarded a 50% share.
If the method of pension apportionment has not been determined earlier, the
court has "discretion to consider the evidence before it and devise a method of its
own." Wisniewski, 286 Ill. App. 3d at 243, 675 N.E.2d at 1368. Here, because the
judgment is silent as to what portion of the pension benefit is marital, by reserving
jurisdiction to enter an allocation order, the court also reserved jurisdiction to determine
the calculation of that allocation. It chose to use the reserved jurisdiction approach 2 to
2
The term "reserved jurisdiction" as used in "reserved jurisdiction approach"
refers to a court's reservation of its jurisdiction to order payment of an interest in a
pension benefit when the interest matures, not to its reservation of jurisdiction to decide
the allocation of that pension benefit. The court here reserved jurisdiction to do both.
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determine the allocation. We will not reverse the court's choice of an apportionment
method unless the court abused its discretion in selecting that method. Wisniewski,
286 Ill. App. 3d at 243, 675 N.E.2d at 1368.
There are two approaches to valuing an unmatured pension upon dissolution of
a marriage: the "immediate offset" approach and the reserved jurisdiction approach.
Robinson, 146 Ill. App. 3d at 476, 497 N.E.2d at 142; In re Marriage of Clabault, 249 Ill.
App. 3d 641, 644, 619 N.E.2d 163, 165-66 (1993). Using the immediate offset
approach, the court determines the present value of a pension benefit, awards the
value of the benefit to the employee spouse and offsets that award with an award of
marital property to the nonemployee spouse. Robinson, 146 Ill. App. 3d at 476, 497
N.E.2d at 143. This approach is usually used "when there is sufficient actuarial
evidence to determine the present value of a pension, when the employee spouse is
close to retirement age, and when there is sufficient marital property to allow an offset."
Robinson, 146 Ill. App. 3d at 476, 497 N.E.2d at 143. Neither party asserts that the
immediate offset approach should have been used here.
The reserved jurisdiction approach is used in cases where it is difficult to place a
present value on a pension due to uncertainties regarding vesting or maturation or
when the present value can be ascertained but lack of marital property makes an offset
impractical or impossible. Hunt, 78 Ill. App. 3d at 663, 397 N.E.2d at 518; Wisniewski,
286 Ill. App. 3d at 241, 675 N.E.2d at 1366. Under the reserved jurisdiction approach,
the court does not immediately compensate the nonemployee spouse at the time of
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dissolution. Hunt, 78 Ill. App. 3d at 663, 397 N.E.2d at 519; Wisniewski, 286 Ill. App. 3d
at 241, 675 N.E.2d at 1366. Instead, it awards the nonemployee spouse a percentage
of the marital interest in the pension and retains jurisdiction over the case in order that
the employee spouse pays the nonemployee spouse his or her portion of that marital
interest " 'if, as and when' " the pension becomes payable. Hunt, 78 Ill. App. 3d at 663,
397 N.E.2d at 519; Wisniewski, 286 Ill. App. 3d at 241, 675 N.E.2d at 1366. The
reserved jurisdiction approach is particularly appropriate where an interest has not
vested at the time of dissolution, because it divides the risk that a pension will fail to
vest. Hunt, 78 Ill. App. 3d at 664, 397 N.E.2d at 519.
The parties agree the pension plan is a defined benefit pension plan, pursuant
to which the value of an employee's pension benefit is dependent on the total number
of years the employee participated in the plan and the final salary the employee was
collecting at the time of retirement. See In re Marriage of Blackston, 258 Ill. App. 3d
401, 402, 630 N.E.2d 541, 542 (1994). The value of the benefit cannot be determined
until retirement. See Robinson, 146 Ill. App. 3d at 475, 497 N.E.2d at 141. Further,
petitioner's interest in the pension had neither matured nor vested at the time of
dissolution because he was not yet eligible to collect his pension and, if he died before
his pension benefits matured, his benefits would cease to exist. Because the plan itself
is of a type which makes valuation virtually impossible until retirement and petitioner's
interest had neither vested nor matured at time of dissolution, use of the reserved
jurisdiction approach was appropriate in this case.
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Under the reserved jurisdiction approach, the court can either (1) devise a
formula at the time of dissolution that will determine both the marital interest on the
pension benefits and the nonemployee spouse's share of that marital interest or (2)
wait to determine the marital interest until the benefits are to be paid, i.e., until the
employee spouse starts to collect his pension. Wisniewski, 286 Ill. App. 3d at 241, 675
N.E.2d at 1366-67. Here, as stated previously, the court did not decide the method of
apportioning the marital interest in petitioner's pension benefits at the time of
dissolution in 1995. But, whether determined at the time of dissolution or at the time of
benefit payment, the calculation of the value of the marital interest under the reserved
jurisdiction approach is the same: pension benefits actually received multiplied by
marital interest percentage (length of time pension benefits accrued during the
marriage divided by total length of time benefits accrued prior to retirement/payment).
The value of the marital interest is calculated as a percentage of each benefit
payment, rather than of the value of the pension benefit at time of dissolution and,
therefore, takes into account the entire time the employee spouse accrued benefits.
Petitioner argues, however, that by taking into account the entire term of petitioner's
participation in the pension plan, including the time the pension accrued after the
divorce, and the benefit earned on the date of retirement rather than that applicable on
the date of the dissolution, the reserved jurisdiction approach violates the literal terms
of the judgment for dissolution. He asserts the judgment is clear and unambiguous and
means respondent should receive one-half of only that portion of petitioner's pension
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accrued from June 14, 1984, the date of the marriage, to March 27, 1985, the date of
the dissolution judgment, i.e., that the 10-year marital portion of the pension must be
calculated in isolation from the years petitioner accrued benefits before and after the
marital period.
Petitioner argues that the correct calculation for the marital portion of his
pension, which gives literal effect to the language of the judgment for dissolution, is that
suggested by his expert: take only the 10 full years of pension benefit accrual from the
date of marriage to the date of dissolution; multiply each year by 2.5% as provided by
the Code for service of less than 20 years, for a total of 25%; and multiply this 25% by
petitioner's salary on the date of dissolution to determine the marital portion of the
pension benefit accrued between the date of marriage and the date of dissolution per
year. Respondent's share of this marital portion would be 50%, or $625.40 per month.
Marital assets generally must be valued as of the date of the judgment of
dissolution. Helber v. Helber, 180 Ill. App. 3d 507, 511, 536 N.E.2d 110, 112 (1989).
However, valuing pension rights as of the date of dissolution as petitioner suggests,
rights which may not be actualized until years in the future, only determines the present
value at the time of dissolution of the benefits expected to be received upon retirement
and necessarily assumes the employee spouse will no longer accrue additional
benefits after the date of dissolution, such as if he stopped working on that date.
Helber, 180 Ill. App. 3d at 511, 536 N.E.2d at 112. Valuing pension rights at the time of
dissolution freezes those pension benefits as of that date. It does not take into account
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the years worked after the dissolution, the cumulative effect of all the years on the
pension benefit or the higher salary the employee spouse will be receiving upon his
retirement, even though the plan calculates the final benefit based on these cumulative
totals.
The value of petitioner's pension rights is the amount of benefits he can expect
to receive upon retirement. Helber, 180 Ill. App. 3d at 511, 536 N.E.2d at 112. That
value is ascertainable and uncontested here because petitioner is already receiving
those benefits. He accrued benefits in the pension plan for 29 full years, for which the
plan pays him benefits of 72.5% of his last salary, or $6,012.83 per month, starting in
December 2002, plus a 3% cost of living increase annually starting in January 2005.
For approximately 10 of those 29 years, or 37.01%, petitioner was married.
Accordingly, the marital portion of his monthly benefit is 37.01% of his monthly benefit,
$2,225.35 per month. Per the judgment for dissolution, respondent should receive 50%
of the marital portion, $1,112.67 per month.
In contrast, petitioner's suggested allocation formula calculates the marital
portion of his pension benefit using solely the 10 years petitioner accrued pension
benefits during the marriage and calculating the benefit as a percentage of the salary at
the date of dissolution. He effectively takes the 10 marital years in isolation from the
years he accrued benefits in the plan before and after the marriage and freezes his
participation in the plan as of the date of the judgement for dissolution, even though the
pension plan determines a final benefit on the basis of the total number of years benefit
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accrued and the salary at time of retirement. Petitioner did not cease his employment
at the time of dissolution in 1995, but petitioner's suggested allocation formula treats
respondent's share of the pension as if he did.
Because petitioner is collecting his pension based on the full 29 years of his
participation therein, the value to him of his 50% of the marital portion of his pension is
$1,112.67 per month (50% x [37.01% x 72.5% of December 2002 salary]). However,
he is arguing that the value to respondent of that identical share should be $625.40 per
month (50% x [25% of March 1995 salary]). The marital shares in the pension are the
same. The parties' agreement to award 50% of the marital portion of the pension to
respondent necessarily means they agreed petitioner should receive the remaining
50%, i.e., they agreed to evenly split the marital portion between them and each share
is the same. If each share is the same, they should be valued the same. The parties
did not agree that respondent's marital share would be valued differently than
petitioner's marital share, yet that is what petitioner essentially argues.
Pension benefits are property interests. In re Marriage of Papeck, 95 Ill. App. 3d
624, 629, 420 N.E.2d 528, 532 (1981). At dissolution, respondent obtained an actual
co-ownership interest in the benefits as marital property; she became a co-owner of the
pension benefits accrued during the marriage. In re Marriage of Krane, 288 Ill. App. 3d
608, 617, 619, 681 N.E.2d 609, 615, 618 (1997); In re Marriage of Papeck, 95 Ill. App.
3d 624, 629-30, 420 N.E.2d 528, 531-32 (1981). Freezing respondent's interest in the
pension as of the date of dissolution denies her the growth in the value of the marital
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share occurring during the period between dissolution and petitioner's retirement, a
growth in value that petitioner, the co-owner holding an identical share, will collect.
The identical percentage of a single pension benefit cannot be worth more to one
person than another.
Notwithstanding petitioner's arguments to the contrary, the judgment for
dissolution does not require an allocation which disregards the time petitioner worked
after the divorce and the higher salary he received after the divorce. By the pension
plan's own terms, each year of service is valued cumulatively: the longer you work, the
higher the percentage of your final salary you will collect as your pension. Nowhere in
the dissolution judgment does it provide how the marital portion of the pension, that
portion accrued between the date of marriage and the date of dissolution, will be
calculated, let alone that respondent's share of the marital portion will be calculated
differently than petitioner's share. Nowhere in the judgment for dissolution does it
provide that, even though the pension plan calculates a pension benefit based on a
participant's total years in the plan and final salary and the value of petitioner's marital
share is calculated on this basis, the value of respondent's identical marital share will
be frozen as of the date of dissolution and will not include credit for the years petitioner
accrued benefits before or after the marriage or for the higher salary he held at
retirement. If this were the case, respondent's share of the pension would have been
ascertainable on the date of dissolution.
Petitioner argues respondent should not share in any increase in his pension
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benefits accrued between the time of the dissolution and his retirement because such
increase is solely due to his postmarital efforts, that any spousal efforts respondent
contributed to the accrual of his pension occurred only during the marital period and
she should not get the benefit of any pension accrual thereafter. Respondent's efforts
were indeed limited to the period of the marriage. However, the pension plan provides
petitioner's pension benefit is calculated based on the cumulative total of his full years
in the plan, here 29 years. That 29-year cumulative total is only possible because of all
the years of benefit accrual, the cumulative result of his solo efforts before the
marriage, his and respondent's efforts as equal partners during the marriage3 and his
efforts after the marriage. Respondent's efforts during the marriage contributed to that
cumulative total, not only to the benefits accrued during the marriage years.
3
Courts consider a marriage to be a partnership of coequals, the partners
working together to enhance the wealth and security of the marital unit. In re Marriage
of Blackston, 258 Ill. App. 3d 401, 405, 630 N.E.2d 541, 544-45 (1994). Any
accumulation of assets during the marriage, including pensions and other less tangible
assets, is considered to be due to both partner's efforts, no matter that one spouse may
have been employed while the other stayed at home, and such assets are considered
marital property, subject to division between the spouses upon dissolution. In re
Marriage of Blackston, 258 Ill. App. 3d at 405, 630 N.E.2d at 545; In re Marriage of
Pieper, 79 Ill. App. 3d 835, 841, 398 N.E.2d 868, 872 (1979).
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The parties agreed respondent should receive a 50% share in the benefits to
which she contributed. Petitioner, as the holder of any remaining share in those marital
benefits, necessarily, therefore, holds the remaining 50% share, a share equal to
respondent's. Petitioner's 50% share is worth $1,112.62 per month. If spouses agree
to equally divide a marital asset, each spouse's share of that asset must obviously be
valued the same, or the division would not be equal. Equal shares must be valued the
same, and the judgment for dissolution does not provide otherwise. The court did not
abuse its discretion in applying the widely accepted reserved jurisdiction approach and
awarding respondent $1,112.67 per month as her 50% share of the marital portion of
petitioner's pension benefit.
Cost of Living Increase
Petitioner also argues the court erred in awarding respondent "the full 3% of the
cost of living increases" and that the yearly increases should be shared in the same
proportion as the pension benefit each party receives. We agree that each party
should receive his or her proportionate share of such increases. The court's order
states respondent "should also pass along the 3% cost of living increases whenever he
receives them." This statement could be interpreted as requiring petitioner to give
respondent the entire amount of any increase. It would be in respondent's favor to
interpret it as such. However, as respondent's response to this argument shows, even
she does not interpret it as requiring petitioner to pay her the full 3% increases. She
merely responds that petitioner's efforts did not contribute anything toward
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respondent's share of the 3% cost of living increase and the court did not abuse its
discretion in passing on the increase to respondent, i.e., in passing on her share of the
increase.
Further, in the body of the court's order, it sets out the amounts petitioner should
have paid respondent as follows:
"December 2002: $1,112.37
January 2003 through December 2003: $1,112.37 per month
January 2004 through December 2004: $1,112.37 per month
January 2005 through December 2005: $1,212.48 per month
January 2006 through December 2006: $1,248.85 per month."
Putting aside for the moment the fact that the above amounts were inaccurately
calculated, the order dictates that the amount petitioner was to pay respondent
increased on January 1, 2005, by $100.11 per month ($1,212.48 less $1,112.37). This
increase represents respondent's proportionate share of the retroactive 3% cost of
living increase petitioner received effective January 1, 2005.4 Similarly, the $36.37
4
On January 1, 2005, petitioner received his first 3% cost of living increase.
Pursuant to the Pension Code, the increase was retroactive to the start of his
retirement and covered three years' increases. 40 ILCS 5/3-111.1(d) (West 2006).
Accordingly, his monthly benefit increased from $6,012.83 to $6,553.96, an increase of
$541.13 (3 yrs x 3% x monthly benefit). On January 1, 2005, therefore, respondent's
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increased amount he was to pay respondent effective January 1, 2006 ($1,248.85 less
$1,212.48), represents respondent's proportionate share of the 3% cost of living
increase petitioner received effective January 1, 2006.5 The court's order makes clear
that it intended petitioner to pass along to respondent only her proportionate share of
his cost of living increases. Petitioner's argument is moot.
Correction of the Court's Order
We note, sua sponte, that the section of the court's order setting forth the
amounts petitioner should have paid respondent monthly from December 2002 through
December 2006, starting with $1,112.37 per month in December 2002, conflicts with an
share of petitioner's monthly benefit increased from $1,112.67 (50% x (37.01% x
$6,012.83]) to $1,212.81 (50% x [37.01% x $6,553.96]), or by $100.13. This increase
represents respondent's proportionate monthly share of petitioner's 2005 retroactive
cost of living increase. Another way to calculate respondent's share of this increase is:
50% x (37.01% x $541.13) = $100.13. Note: the circuit court incorrectly awards
respondent an increase of only $100.11 per month.
5
On January 1, 2006, as he would each year thereafter, petitioner received
another 3% cost of living increase, this time in the amount of $196.61 per month (3% of
his 2005 monthly benefit of $6,553.96). Accordingly, respondent's share of this
increase was 50% x 37.01% x $196.61, or $36.38 per month. Note: the circuit court
incorrectly awards respondent an increase of only $36.37.
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earlier section in the order directing petitioner to pay respondent $1,112.67 per month.
The amounts set forth in the later section are the allocation amounts suggested by
respondent's expert and accepted by the court, but they are inaccurate.
The expert originally calculated respondent's share of petitioner's benefit using
the following formula: 50% x (37.01% x $6,012.83) = $1,112.67. However, for later
uses of the formula, instead of using 50% x 37.01%, she simplified it as 18.5% (or 50%
x 37%), thus reducing respondent's share by 50% x .01%. Using this simplified but
inaccurate formula, the expert incorrectly determined respondent's share to be
$1,112.37 per month (18.5% x $6,012.83), thus reducing respondent's share by $0.30
per month ($1,112.67 - $1,112.37). Her calculations for the subsequent years also
used the simplified formula and are similarly incorrect. Although the difference in the
amounts is small, respondent should receive the exact amount she is due.
To that end, applying the correct formula to the monthly benefits petitioner
received from 2002 through 20066, the amounts petitioner should have paid respondent
6
The record shows petitioner's benefits for 2002 through 2006 were as follows:
December 2002 $6,012.83
January 2003 through December 2003 $6,012.83 per month
January 2004 through December 2004 $6,012.83 per month
January 2005 through December 2005 $6,553.96 per month
January 2006 through December 2006 $6,750.57 per month
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are as follows:
December 2002 $1,112.67
January 2003 through December 2003 $1,112.67 per month
January 2004 through December 2004 $1,112.67 per month
January 2005 through December 2005 $1,212.81 per month
January 2006 through December 2006 $1,249.19 per month.
We remand for correction of the order to reflect these allocation amounts.
For the reasons stated above, we affirm the decision of the circuit court and
remand for correction of the order.
Affirmed and remanded with instructions.
HOFFMAN, P.J., and HALL, J., concur.
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REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
(Front Sheet to be Attached to Each case)
In re MARRIAGE OF
PAUL D. RICHARDSON,
Petitioner-Appellant,
and
PATRICIA KENNEDY RICHARDSON,
Respondent-Appellee.
No. 1-07-1201
Appellate Court of Illinois
First District, Second Division
March 4, 2008
JUSTICE KARNEZIS delivered the opinion of the court.
HOFFMAN, P.J., and HALL, J., concur.
Appeal from the Circuit Court of Cook County.
The Honorable Raul Vega, Judge Presiding.
For APPELLANT: Paul J. Bargiel, P.C., of Chicago (Paul J. Bargiel, of counsel) and
Law Offices of Donald E. Puchalski, of Chicago (Donald E.
Puchalski, of counsel)
For APPELLEE: Jerome Marvin Kaplan, of Chicago
24