Summary
The Alaska Supreme Court affirmed the denial of David Thomson’s motion to amend a Qualified Domestic Relations Order governing division of his Public Employees’ Retirement System benefits. Applying Hartley v. Hartley, the court held that the parties’ property settlement lacked clear language requiring use of salary data from the marriage period rather than the employee spouse’s highest salary at retirement. The court concluded that the marital portion was properly calculated using the coverture fraction and affirmed the superior court.
Topics
Practice areas
Questions Presented
- Whether the parties' property settlement agreement clearly required Marjorie's share of David's defined-benefit retirement account to be calculated using the salary data available at the time of divorce rather than David's highest salary years at retirement.
- Whether the agreement's references to the marital portion of the retirement account, service accrued during the marriage, and property acquired after separation constituted clear language overriding the Hartley rule.
Holdings
- Absent clear language to the contrary in the property division agreement, a former spouse's share of a defined-benefit retirement plan subject to deferred distribution must be calculated using the employee spouse's highest salary years at retirement, with the marital portion determined through the applicable coverture fraction.
- References to the marital portion of the retirement account and to service accrued during the marriage establish the time period used in the coverture fraction; they do not clearly limit the salary used to calculate the benefit to salary earned during the marriage.
- A provision stating that property acquired after separation was nonmarital did not clearly require calculation of Marjorie's retirement share using David's pre-separation salary, because it applied to other property and did not exclude post-separation increases in the value of the marital portion of the retirement benefit.
Key quotations
“Without clear language requiring the use of David’s 2003-2005 salary data, Marjorie’s share must be calculated based on David’s actual benefit, using his highest salary data at retirement.” (Opinion at 7)
“A deferred distribution of benefits is implemented via a QDRO, which does not add to or modify an agreement to distribute benefits but “simply enforces a court order calling for division of retirement benefits.”” (Opinion at 6-7)
Factual background
David and Marjorie Thomson divorced in 2006 after separating in 2004 and agreed to divide their marital estate, including David's Alaska Public Employees' Retirement System defined-benefit account. Their agreement awarded Marjorie 46.96% of the marital portion of David's account, and a QDRO provided that her share would be based on service credited during the marriage. After David obtained an updated projection based on his highest salary years at retirement, he sought to amend the QDRO to use the lower salary data used in the original 2006 valuation. The superior court concluded that the settlement lacked the clear language required to depart from the retirement-benefit calculation mandated by Hartley v. Hartley.
Procedural history
The parties incorporated a property settlement agreement and QDRO into their 2006 divorce decree. After receiving an updated retirement-benefit projection in 2014, David moved to amend the QDRO so that Marjorie's share would be calculated using the salary data from the 2006 projection. The superior court denied the motion and denied reconsideration, and the Alaska Supreme Court affirmed.