QDRO Divides Pension at Retirement Date Unless Agreement Specifies Otherwise

May 14, 2016 | Blog, Court Decisions, Equitable Distribution

Icon for author Brian Vertz Brian Vertz

Bortz v. Bortz, No. 1147 MDA 2015 (April 27, 2016)(non-precedential)

Husband in this case was a Williamsport police officer who entered into a settlement with his wife when they divorced.  Their agreement provided that she would receive fifty-five percent (55%) of the “marital portion of Husband’s retirement account(s) and/or pension plan(s) through his employment with the City of Williamsport.” The “marital portion” would be determined “pursuant to current law,” said the settlement agreement. When it was time to sign the Qualified Domestic Relations Order (actually a QDRO-like order, since municipal pensions are generally not governed by ERISA), Husband refused.  The QDRO that Husband rejected would have multiplied a coverture fraction times Husband’s pension benefit on the date of his retirement, plus cost-of-living adjustments to be granted in the future.

The trial court issued an order directing Husband to sign the QDRO, holding that the QDRO was consistent with the settlement agreement.  The trial court rejected Husband’s argument that the phrase “pursuant to current law” was ambiguous.  Husband also argued that he was entitled to keep post-separation increases in his pension benefits if they were attributable to his post-separation efforts and contributions, citing Bianchi v. Bianchi, 859 A.2d 511 (Pa.Super. 2004).

The Superior Court affirmed, citing 23 Pa.C.S. § 3501(c), which provides that a pension shall be divided by applying a coverture fraction to the benefit that includes “all postseparation enhancements except for enhancements arising from postseparation monetary contributions.” This was the “current law” which the parties had referenced in their settlement agreement, and as such, it was unambiguous.

Any variation from this method of dividing a pension would have to be articulated more precisely in the written agreement.

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