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State Police Pension Plan - Division by QDRO
© 2003 National Legal Research Group, Inc.
FLORIDA: Board of Trustees of Orlando Police Pension Plan v. Langford, 833 So. 2d 230 (Fla. Dist. Ct. App. 2002).
State police retirement benefits cannot be divided by a qualified order, but their value can be divided by other methods of division.
The husband and wife were divorced in 1989. The dissolution judgment ordered the husband to pay $350 per month in permanent alimony, and it incorporated by reference a settlement agreement which recognized that the husband had a vested interest in a retirement plan through his employer, the Orlando Police Department, and that said retirement plan was a marital asset subject to equitable distribution. The agreement also provided that the wife would be entitled to 50% of the value of the retirement plan as of the date of dissolution and that, through the entry of a QDRO, 50% of the husband's retirement account would be placed in a separate account in the wife's name to be invested and administered separately from that of the husband's. The wife was given the option thereunder to take her share in a lump sum upon written notification to the plan administrator.
When the husband retired, the wife moved for an entry of a QDRO pursuant to the settlement agreement. The trial court entered an apportionment order requiring the plan administrator to make monthly payments to the wife of an amount equal to her 50% interest in the accrued benefits as of the date of the dissolution. The husband appealed, arguing that the settlement agreement required a one-time payment of one-half of the yearly pension benefits, payable over 12 months. In Langford v. Langford, 792 So. 2d 473 (Fla. Dist. Ct. App. 2001), the court of appeal affirmed, requiring ongoing payments every year. Thereafter, the plan administrator and the board of the Orlando Police Pension Plan petitioned the trial court to clarify or dissolve the apportionment order. They argued that under Florida and federal law QDROs cannot be used to force direct payments to a nonparticipating spouse of a portion of a participating spouse's municipal pension plan.
Under the provisions of the pension plan, none of the benefits of a participating member were assignable, nor were they subject, either in law or equity, to execution, levy, attachment, garnishment, or other legal process. An exception was made for an award by a court of competent jurisdiction pertaining to alimony or child support, if so provided under applicable Florida law. The governing section of the Florida law, Fla. Stat. Ann. 185.25, makes municipal pension or retirement benefits exempt from taxation and further provides that such benefits shall not be subject to execution or attachment or to any legal process whatsoever and shall be unassignable. The trial court ruled that the husband had waived the anti-alienation provisions of the pension plan and Fla. Stat. Ann. 185.25 by agreeing in the settlement to divide the plan as part of an equitable distribution of his and his wife's marital assets, and by agreeing to the entry of an apportionment order.
The appellate court disagreed. Looking to prior Florida case law, especially Board of Trustees of City General Pension Fund v. Vizcaino, 635 So. 2d 1012 (Fla. Dist. Ct. App. 1994), which also involved a pension plan created by the legislature, and which contained an anti-alienation provision, the court agreed with the employer that it could not be ordered to pay the former wife pension benefits directly in order to achieve an equitable distribution of marital assets. It expressly rejected the argument that the order could be upheld under the Florida statute, Fla. Stat. Ann. 61.1301, which authorized the use of income deduction orders to collect alimony and child support. It also rejected the contention that the anti-alienation provisions had been impliedly repealed by the enactment of a variety of later statutes under Chapter 61, which establish that pensions are marital property if earned during the marriage. Although the court was reluctant to agree with the Vizcaino decision, it felt bound to do so as it believed that it was not authorized in the construction of a statute to create exceptions not specifically made. As the special Act which created the police retirement plan and Fla. Stat. Ann. 185.25 purported to make the benefits wholly "unassignable," even to spouses, unless the award is for alimony or child support, the court was bound by the plain language of the statute and the special Act.
In rendering its decision, the court expressed its obvious displeasure in having to rule as it did. It recognized that under the Vizcaino decision the court therein pointed out that the spouse was not entirely without remedy as he or she could still seek an order which required the husband to pay the wife her allotted portion each month upon receipt, and that the order was enforceable by contempt. But, in doing so, it queried whether this was an illusory remedy, given the costliness of the process, particularly in cases involving relatively small amounts. The assumption that the contempt process was available to enforce such an equitable distribution award was described by the court as a "leap of faith." Moreover, the court cited to numerous decisions from other jurisdictions which followed the majority rule in finding that anti-alienation provisions like that in the instant case are inapplicable to bar the equitable distribution of pension benefits, or in finding such provisions invalid when they conflict with equitable distribution laws, like Florida's 61.075(5)(a)4, which make such pension assets marital and require equitable distribution. Analyzing these out-of-state cases, the court declared that they are based on the "logical conclusion" that, regardless of how broadly stated, anti-alienation provisions are spendthrift protections designed to bar claims by creditors but not claims made by a spouse in a community property state or an equitable distribution state. The court continued that a spouse or a former spouse should not be treated as the equivalent of a creditor in a dissolution proceeding but, rather, as a true owner of his or her portion of the pension benefits. Given that this was how the majority of pension plans are dealt with by the courts in Florida, it failed to see why municipal or local law pension plans should be treated differently.
While the court concluded that it was bound to follow the clear language of the plan and the statute, it, nevertheless, felt that because this was a question of great public importance that was recurring in family law cases, and noting that the Florida Supreme Court had not had the opportunity to address this issue, it certified the question to the Florida Supreme Court for review.
Finally, in reversing the lower court's order and remanding the matter, the appellate court took one more opportunity to suggest a possible blueprint for alleviating the harshness of its reversal. It noted that the trial court, as a court of equity, was entitled to devise a remedy through other means to safeguard the wife's interest in the pension, which it labeled as "rightfully hers." It stated that it may be possible to construct a decree which requires payment of the pension funds to a trustee to be held in a joint account for the parties' joint benefit, and requires the trustee to distribute the funds when received to the party entitled to them. Or perhaps, declared the court, the husband could be required to post a bond with the court to ensure that the former wife receives her share of the funds on a timely basis. In conclusion, it remarked that if these proposed remedies failed, the court was free to reconsider the total equitable distribution and alimony scheme contemplated by the original decree and settlement, since a key portion of the total plan could not be achieved. While the legitimacy of each of these offered remedies might be subject to challenge, the court's true view of the issue was clearly made known.
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