Equitable Distribution of Post Office Pensions Under New York Divorce Law
by Gary Port /
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April 6, 2008
As I have pointed out else where, under New York divorce law, pensions earned during marriage are subject to equitable distribution. However, since there are a variety of different pensions available from the multitude of employers, the rules are not always consistent.
For example, military disability pay is not subject to equitable distribution.
The Post Office pensions also presents unique challenges and issues. Since the pension comes from the federal government is it needlessly complicated, as least for the divorce lawyer.
One important issue was recently addressed by Nassau County Divorce Judge, Anthony Falanga. Justice Falanga is one of the brighter and more pragmatic judges deciding divorce cases in New York. He spent over 30 years as a divorce lawyer himself, and understands the issues and concerns of the litigants.
In the case of Grimmer v. Grimmer , published in the New York Law Journal on March 21, 2008, on page 31, Justice Falanga addressed the issue of whether all or just part of a Post Office pension is subject to equitable distribution under New York divorce law. He found that as an employee of the Post Office, the husband, was not eligible to contribute to or receive social security. Instead, a part of his Post Office pension would be a replacement for social security. Social Security is not subject to equitable distribution.
Citing the case of Wallach v. Wallach 37 AD3d 707, Justice Falanga observed that under the Federal Civil Service Retirement System (FERS) a court was directed to “deduct from the value of the retirement benefit the portion thereof that substitutes for social security.”
Based upon the Wallach decision, Justice Falanga found that the entire Post Office pension is not subject to equitable distribution. The portion of the pension that substitutes for social security must be removed. Assume the husband is getting $1500 a month in the pension. He worked 30 years, and was married for the entire 30 years. The court orders that the pension be divided in half. Further assume that the social security substitution is 30 percent. So, only $1000 of the $1500 is pension, while the remaining is counted as social security. The wife would get $500 a month (one half of $1000) not $750 a month (one half of $1500).
An important caveat for the holder of the pension is to make sure that your lawyer knows and understands this fact. Typically, in divorce actions, we divorce lawyers hire a pension appraisal service to provide the value of the pension. Make sure that the pension appraisal takes into account the social security replacement.