The Question

How should a husband's civil service retirement benefit be divided between divorcing spouses, when the wife will also be eligible for social security benefits and the husband will not? In other words, does the wife's social security benefit have an effect on what share she will receive of her husband's civil service pension?

The Short Answer

The civil service retirement is considered a marital asset and should be treated the same as any other retirement plan, and is therefore subject to the same distribution analysis as Boyett v. Boyett, 703 So. 2d 451 (Fla. 1997). 

According to Florida law, social security benefits cannot be taken into consideration when determining distribution of assets, even when one spouse has paid into a substitute program in lieu of social security. However, the husband's portion of his civil service retirement income cannot be counted for determination of alimony payments.

Historical Analysis

Throughout the different states, there are two schools of thought about how a substitute program such as a social service pension should be handled as far of division of marital property in event of a divorce. One side holds that out of fairness, some portion of the retirement income should be considered nonmarital, in order to compensate for the other spouse's social security income. See Cornbleth v. Cornbleth, 508 A.2d 369 (Pa. 1990).

The other side holds that the retirement income should be treated strictly as a marital asset, with no consideration given to the additional social security income of the other spouse. The state of Florida falls squarely into this camp. See Johnson v. Johnson, 726 So. 2d 393 (Fla. 1st DCA 1999).

All of the states agree, however, as noted in Hisquerdo v. Hisquerdo, 439 U.S. 572 (1979), that social security benefits cannot, under any circumstances, be included as part of an equitable distribution award. Herein lies the problem.

Courts are not only prohibited from including social security benefits in a divorce agreement, but also from taking them into consideration when dividing up marital property such as retirement benefits. In Johnson, the husband had a social security replacement plan, and argued that it should not be considered marital property since his wife's social security benefits were not considered marital property. 726 So. 2d at 394-95.

The court held that replacement plans are not the same as social security benefits, and are therefore subject to distribution as marital assets. Thus, any sort of retirement plan or pension other than social security benefits is equally divided in Florida, without any sort of regard for each spouse's overall retirement income.

But…

The inequity of the spouses' retirement incomes in these situations has not gone unnoticed by the courts. In Bain v. Bain (Bain I), the husband worked for NASA and participated in the Civil Service Retirement Program. 553 So. 2d 1389 (Fla. 5th DCA 1990). In an opinion statement, the court discussed the inequity of a spouse receiving both the marital share of the replacement plan along with full social security benefits upon reaching the qualifying age.

However, the court was forced to reverse the trial court for taking into consideration the wife's social security benefits. The court did protect the husband by ensuring that alimony requirements could not be based on his income from his half of the retirement plan.

Upon his retirement seven years later, the husband petitioned the court to modify the alimony award, arguing that his only income came from his retirement plan. Bain v. Bain (Bain II), 687 So. 2d 79 (Fla. 5th DCA 1997). The court could not, and would not require the husband to use his share of the retirement income, which he received as part of the divorce decree, to pay alimony, and so it abated the alimony award.

In the case under consideration, the husband has participated in the civil service retirement system in lieu of social security, and is therefore not eligible to receive social security benefits. After his retirement, his only income will be from his civil service pension and his thrift savings plan, whereas the wife will receive social security benefits in addition to her share of her husband's benefits.

While this seems plainly inequitable, the wife's social security benefits cannot be used as a basis for modifying the distribution of the husband's retirement plan, nor can a portion of his retirement plan be considered nonmarital under Florida law, pursuant to Johnson.

However…

Once the husband retires, he can get any alimony award terminated or abated, as he can't be forced to pay alimony from his portion of the retirement plan. That would be the same as giving the wife a larger share of his retirement benefits.

In fact, depending on the circumstances, an argument could be made for the court to require the wife to pay alimony to the husband at that time, if the distribution of his retirement income places him in a position of need and gives the wife the ability to pay.

This is tricky, because the court cannot look at the income disparity alone to award alimony, however it can use alimony to correct "mechanical" equitable distribution factors that result in unfair distribution. This discretion of the court is based on the final factor for alimony, which is "any factor necessary to do equity and justice between the parties."

While this factor does not change the question of need and ability to pay with regard to alimony awards, it does give the court a certain amount of discretion in order to avoid inherently unfair outcomes.

By Kenny Leigh