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A Court Has No Authority to Require Disbursement of Retirement Benefits Other Than as Set Forth in the Pension Plan

Melvin and Jeanne Jensen had been married for 22 years when, in June 1989, they separated. Jeanne promptly initiated a marital dissolution proceeding, and in January 1990, the Orange County Employee Retirement System (OCERS) was joined as a party claimant. Melvin had been employed by the Orange County District Attorney’s Office since shortly after marriage. At the time of separation, he was eligible to retire but had elected not to. Nonetheless, Jeanne wanted the immediate distribution of her interest in the plan. OCERS objected, claiming it was not required to disburse any funds until Melvin actually retired.

A judgment was entered which included an award of spousal support to Jeanne, with the Orange County divorce court reserving jurisdiction over the community interest in the plan. At a subsequent hearing, counsel for OCERS pointed out that the contract for the county retirement plan is set forth in the Government Code and can only be changed by legislative mandate. Furthermore, counsel for OCERS conceded the plan did not specifically prohibit early distribution of Jeanne’s interest but explained the plan does not authorize it either. The Orange County divorce court interpreted Civil Code Section 4800.8 to mean “this [Orange County trial court] can make any order that is appropriate relative to this public plan provided it doesn’t run afoul of other aspects of the law regarding the plan.” At the conclusion of the hearing, the Orange County divorce court asked: “if this were a private plan, would the relief requested in the moving papers or the papers submitted by the petitioner be appropriate?” The counsel for OCERS replied “If it were a private plan, yes, it would be appropriate,” whereupon the court said it was going to grant the request. The Orange County divorce court ordered OCERS to pay Jeanne directly one-half of the community interest in the retirements benefits. As of July 1989, this amounted to a monthly benefit of $877.36, to be adjusted annually by the cost of living increases commencing with the cost of living increase in 1990.

The question presented is whether a public pension plan, such as OCERS, may be required, in the absence of specific provision in the plan, to disburse vested and matured community property retirements funds to a nonemployee spouse before the employee spouse actually retires. In In re Marriage of Nice (1991) 230 Cal.App.3d 444, the wife wished to receive her share of the community pension immediately. The Board of Pension Commissioners was ordered by the court to commence making payments. The Orange County Court of Appeal reversed that order because it was not something the OCERS was contractually obligated to do.

The terms and conditions of the OCERS, as set forth in Section 31450 of the Government Code, do not permit the payment of benefits before the employee spouse retires. Additionally, under Government Code Section 31673, a member of OCERA is eligible to receive a retirement allowance only “upon retirement.” And Government Code Section 31680 suggests that an employee must actually stop working in order to receive retirement benefits. Melvin’s Orange County divorce attorney acknowledged that the county retirement plan does not specifically provide for payment. Furthermore, Melvin insisted that 4800.8 mandates the action taken by the Orange County divorce court. However, that is incorrect. As explained in In re Marriage of Carnall, (1989) 216 Cal.App.3d 1010, the objective of Civil Code Section 4800.8 “is to ensure that [wife] and others similarly situated receive their full and fair community share of a spouse’s retirement plan.” Civil Code Section 4800.8, merely safeguards the spouses’ respective interests by ordering the division of the community retirement plan in accordance with the plan; it does not circumscribe the manner in which the division of retirement benefits will be accomplished. The Orange County divorce court has no authority to require disbursement of retirement benefits other than as set forth in the plan. The county retirement plan does not provide for the distribution of benefits to a nonemployee souse before the employee spouse actually retires.

The judgment is reversed, and the matter is remanded to the Orange County divorce court with directions to revise the judgment.

In re Marriage of Jensen, 235 Cal.App.3d 1137 (1991).