By: Marvin Snyder
For the Fall of the Year we offer an Autumn harvest of pension topics for your selection.
An employee's pension plan consists of an annual deposit of apples each year during work. The plan keeps a figurative basket for each employee into which the apples are placed.
The employee earns a number of apples each year depending on pay and service as set forth in a plan document and explained in a booklet. The higher the pay and the more service, the more apples are accumulated. The number of apples in the basket represents the employee's accrued pension benefit. Each year the employee gets a fancy benefit statement on gold bordered paper that states the number of apples available in the individual's record keeping basket.
Then comes the sad day when the employee has a marital separation. Some time goes by while attorneys are engaged, papers are filed, and court dates are set. A list of property is drawn up, and then the question of the pension arises. The employer writes a letter telling the employee how many apples were in the basket at the date of marital separation and how many are presently in the basket now.
All parties now know how many apples there were and how many there are now, but they don't know how to translate apples into values. What are these baskets worth? And, do we care what they were worth when the marital separation occurred, or what they are worth now?
The price of apples has changed with the passage of time. They keep getting more expensive. A basket with a fixed number of apples in it now costs more than the same basket with the same number of apples cost a few years ago.
Here are some possibilities of how to figure out the marital property in this matter:
Discard "A" because that old value is outdated.
Discard "C" because that includes apples added after the date of marital separation.
Use "B" because that limits the number of apples in the basket to the ones that were there on the date of marital separation, but determines the real life value of them now.
Note: for convenience the apples story deals with the date of marital separation, but the ideas apply as well to date of filing of divorce complaint or any other appropriate cut-off date for marital property.