California Supreme Court Clarifies Law On Division Of Retirement
Tim served in the military before he married Julie. While they were married Tim worked as a firefighter. While employed as a firefighter Tim accrued benefits in a CALPers retirement plan. He also had the opportunity to purchase four additional years of pension credit for his four years in the military. At the time of divorce Julie argued that all four of the additional purchased credits of pension benefits were community property because community property money was used to purchase the extra benefits. Until now, the law was unclear regarding how to handle this additional purchased benefits.
Justice Chin writes for the Supreme Court. Except for the community’s contribution to the cost of obtaining the credit, the four years of additional credit are the husband’s separate property because he rendered the four years of military service before the marriage. The important question to ask is not when the benefits were purchased, but instead, when the services were rendered. It was appropriate, and within the trial court’s discretion, to order Tim to pay to Julie half the cost expended to purchase the benefit, but she does not get 50% of the additional pension benefits (that far exceeded the purchase price).