Friday, April 21, 2006

Case Law Development: Division of Pension Gives Entitlement to Share of Deferred Retirement Option Program

An en banc decision by the Florida Court of Appeals aligns Florida with California and Louisiana courts in holding that a dissolution judgment distributing an employee-spouse’s retirement or pension benefits entitles the non-employee spouse to a portion of the former spouse's later participation in a Deferred Retirement Option Program (DROP) account.  Here, Husband and Wife had divorced and Wife was awarded a portion of Husband’s pension.  Husband later elected to participate in a DROP program, in which in lieu of retirement, he would continue to work and the retirement funds that would ordinarily be paid out would be deposited to a DROP account, with interest and cost-of-living adjustments.  Wife argued that she should be entitled to a portion of the DROP account funds, including interest and COLA adjustments, because a portion of the funds deposited represented pension funds that she had been awarded in the dissolution.  The Court of Appeals agreed, concluding that “the former wife received an undivided individual property right in the former husband's retirement account that, under the dissolution judgment, entitles her to a pro-rata share of his DROP fund (that portion of the DROP fund the former wife would have received but for the former husband's deferring retirement benefits to the DROP fund).”  A dissenting judge found this to constitute an improper post-judgment modification of a property division.

Pullo v. Pullo, 2006 Fla. App. LEXIS 5407 (1st Dist. April 18, 2006) bgf

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