Mick v. Mick

OPINION

BIVINS, Judge.

This case is a domestic relations action involving the division of the parties’ retirement benefits upon the dissolution of their marriage. Husband is presently retired and is receiving civil service retirement benefits. The trial court awarded each party half of Husband’s retirement benefits. Although Wife’s civil service retirement benefits have vested, Wife has not yet retired and at trial indicated that she had no present intention to retire. Husband contended at trial that the court should award him his portion of Wife’s retirement benefits when Wife becomes eligible to retire even if Wife chooses to continue working. The trial court awarded Husband his interest in Wife’s retirement benefits when Wife retires.

The sole issue in this appeal is whether the trial court erred in holding that Husband would not receive his interest in Wife’s retirement benefits until Wife’s retirement. This case is controlled by our recent decision in Ruggles v. Ruggles, 114 N.M. 63, 834 P.2d 940 (Ct.App.1992). In Ruggles, we held that “pay as it comes in” under Schweitzer v. Burch, 103 N.M. 612, 711 P.2d 889 (1985), means that pensions should be divided when actually received, not, as argued by Husband here, at the earliest date they could potentially be received. We therefore affirm the decision of the trial court.

Judge Donnelly’s dissent makes a strong argument for immediate distribution to a non-employee spouse of his or her community interest in the employee-spouse’s retirement benefits, which are vested and matured, when the employee-spouse postpones distribution of those benefits by electing to continue to work. This court in Mattox v. Mattox, 105 N.M. 479, 734 P.2d 259 (Ct.App.1987), was similarly disturbed by the inequity of allowing the employee-spouse to unilaterally delay payment of retirement benefits to the detriment of the other spouse. In that case, we relied on In re Marriage of Gillmore, 29 Cal.3d 418, 174 Cal.Rptr. 493, 629 P.2d 1 (1981), to support immediate division of the retirement benefits. We were only able to reach that result because of the prospective application of Schweitzer v. Burch, 103 N.M. 612, 711 P.2d 889 (1985). See Mattox, 105 N.M. at 484 n. 3, 734 P.2d at 264 n. 3 (where we recognized the “pay as it comes in” method was now mandatory). Mattox slipped through just before the gate closed and should not be read as modifying Schweitzer. See Alexander v. Delgado, 84 N.M. 717, 507 P.2d 778 (1973).

While it may seem unfair to require the non-employee spouse to wait until the employee-spouse retires to receive his or her share of retirement benefits, there is a countervailing inequity, as Judge Donnelly notes in his discussion of Schweitzer, in granting to the non-employee spouse an amount that might not even be received if the employee-spouse dies before the benefits are paid out. Thus, it is easy to see two inequities which result in a “Hobson’s Choice.”

On the one hand, by delaying distribution until the employee-spouse retires, the non-employee spouse is deprived of his or her share of a community asset distributable in cases where the interest is vested and matured but for the employee-spouse’s election to continue working. On the other hand, if the employee-spouse is required to pay the non-employee spouse his or her share of the then vested and matured but not yet received retirement benefits, or set aside property equal in value to that interest, the employee-spouse also suffers a detriment. The longer the employee-spouse works, the less retirement benefits that spouse will receive. In other words, the value of the benefits decreases each day the employee-spouse continues to work beyond the date of eligibility. Similarly, the employee-spouse suffers a potential detriment if he or she dies before receiving the retirement benefits. In either case, that spouse will have paid the non-employee spouse his or her share of the benefits without receiving an equivalent share. Moreover, it is certainly conceivable that an employee-spouse could be forced into retirement in situations where the economics would not allow continuation of employment.

This approach finds support in cases dealing with division of other marital assets upon divorce. In Cox v. Cox, 108 N.M. 598, 775 P.2d 1315 (Ct.App.), cert. denied, 108 N.M. 624, 776 P.2d 846 (1989), this court found it more equitable to require a spouse to pay goodwill “in the future as and when it is actually received” rather than pay to his or her spouse a share of current value of the business. Id. 108 N.M. at 601, 775 P.2d at 1318. We reasoned that this approach “precludes having the professional spouse pay a lump sum at the time of the dissolution for goodwill which may never actually be received. It prevents a ‘hypothetical forced sale’ of the business.” Id.

In addition, we believe that implicit in Schweitzer is the recognition that there is no way to achieve total fairness and a policy that favors people continuing to be productive citizens as long as they are able, even beyond retirement eligibility. This policy is consistent with legislation that disfavors job discrimination based on age. See, e.g., NMSA 1978, § 28-1-7(A) (Repl.Pamp.1991).

For the reasons stated, we affirm the trial court.

IT IS SO ORDERED.

ALARID, C.J., concurs. DONNELLY, J., dissents.