Opinion
No. 4-730 / 04-0711
Filed December 22, 2004
Appeal from the Iowa District Court for Black Hawk County, Joseph Moothart, Judge.
The respondent appeals from the decree dissolving her marriage to the petitioner. AFFIRMED.
Terry Parsonsof of Olson Parsons, Cedar Falls, for appellant.
Brian Sayer of Dunakey Klatt, P.C., Waterloo, for appellee.
Heard by Huitink, P.J., and Mahan, Miller, Vaitheswaran and Eisenhauer, JJ.
Shannon Burrage appeals from the decree dissolving her marriage to Michael Burrage. She contends the district court erred in using the present value method to value the parties' pensions. Michael requests an award of appellate attorney fees. We affirm.
I. Background Facts and Proceedings.
Shannon and Michael were married December 27, 1969. At the time of dissolution, Shannon was fifty-three years of age and Michael was fifty-four. Michael filed a petition to dissolve the marriage in August 2003.
Michael has been employed by John Deere and Company since July 1972. He earns $26.00 per hour and is in good health. Shannon has been employed by Allen Hospital since 1972 and earns $22.00 per hour, working approximately fifty hours per week. She has had several serious health problems, including cervical cancer, breast cancer, a hysterectomy, and bleeding ulcers.
At trial in March 2004, the primary dispute was the division of the parties' pensions. Both parties have pensions through their employment. The pensions are vested. Michael has a John Deere pension with a present valuation of $86,081.10 and a John Deere Savings Plan with a current balance of $55,784.59. His accrued monthly retirement benefit is $1128.49, payable at age sixty-five. Shannon has three retirement accounts with present valuations of $48,744.94, $24,455.71, and $63,421.81. Shannon's estimated monthly retirement benefit payable at age sixty-five will be $1151.00, and her earned monthly benefit is $693.79.
At the time of trial, Michael had the opportunity to take early retirement with a monthly benefit of $2500 until age sixty-three when the benefit would reduce to $1467.00 per month. During the course of their marriage, Michael stated to Shannon his intention to take early retirement when it became available. However, Michael testified at trial his economic situation was such that he could not afford to take an early retirement and had no plan to do so.
At trial, Michael asserted the parties' retirement assets were approximately equal based on present valuations and requested each party be awarded their individual retirement assets. Shannon argued it was difficult to make an accurate valuation of the pensions and cited Michael's opportunity for early retirement. She valued her pension between $61,632.14 and $101,757.22. She valued Michael's pension between $73,182.40 and $395,438.07. Shannon requested all of the retirement assets be divided equally using Qualified Domestic Relations Orders (QDROs).
The district court found the present valuation method was the most equitable in dividing the retirement assets. Adopting Michael's valuation, the court valued Michael's retirement assets at $141,865.69 and Shannon's at $136,622.50. The court awarded each party their own pension and savings plan.
II. Scope and Standard of Review.
Our review of economic provisions of a divorce decree is de novo. In re Marriage of Campbell, 623 N.W.2d 585, 586 (Iowa Ct.App. 2001). This standard requires us to examine the entire record and adjudicate anew rights on the issues properly presented. Id. We recognize the value in listening to and observing the parties and witnesses. See Iowa R. App. P. 6.14(6)( g). Consequently, we give weight to the findings of the trial court, although they are not binding. Campbell, 623 N.W.2d at 586.
III. Analysis.
Shannon argues the district court erred in using present valuations of the retirement assets and in awarding the parties their own assets. She argues QDROs will most equitably divide the retirement assets because they allow division of actual assets and are not based on assumptions and speculations. She also claims the record does not support the use of the present values assigned by the trial court.
Pension benefits are treated as marital property subject to equitable division. In re Marriage of Scheppele, 524 N.W.2d 678, 679 (Iowa Ct.App. 1994). They are considered in formulating an equitable distribution of property. Id. However, the fact that pensions are considered marital property does not necessarily mean they must be divided. In re Marriage of O'Connor, 584 N.W.2d 575, 576 (Iowa Ct.App. 1998). Rather, the courts do what is equitable. Id. at 576-77.
Pension rights are not easily valued. In re Marriage of Fall, 593 N.W.2d 164, 167 (Iowa Ct.App. 1999). One method is to determine the present value of the benefits and allocate a share to the pensioner's spouse (the present-value method). In re Marriage of Benson, 545 N.W.2d 252, 255 (Iowa 1996). Although this method has the advantage of immediate distribution, it also has several disadvantages. Id. Valuation of a pension is complicated (especially when the plan is unvested) and requires the services of an actuary. Id. Moreover, the financial obligation resulting from a lump sum payment is often beyond a pensioner's present economic ability to pay. Id. Because the parties' pensions are vested and were valued approximately equally, these disadvantages are not present in this case.
Current valuation can be bypassed by providing payment out of future benefits if and when received (percentage method). In re Marriage of Curfman, 446 N.W.2d 88, 90 (Iowa Ct.App. 1989). Under this method, each spouse may be awarded an appropriate percent to be paid if and when pension is payable, apportioning benefits only if and when paid. Id. This allocates equally between spouses the risk that the pension may never be paid. Id. It further assures similar retirement security for both spouses. In re Marriage of McLaughlin, 526 N.W.2d 342, 344 (Iowa Ct.App. 1994). This court has found this division of retirement plans through a qualified domestic relations order to be the preferred method of valuation of a pension benefit. Id. However, such a division of pension benefits is not an absolute requirement. Fall, 593 N.W.2d at 167.
Shannon argues using a QDRO to equally divide the pensions is most equitable because there is uncertainty involved here in using the present-value method. She first argues there is uncertainty as to the number of years of pension payments. Shannon contends the life expectancy used by the trial court of 31.4 years (a figure provided by a local accountant) differs significantly from the 26.14 years used in the Standard Mortality Table from the Iowa Code. Shannon also points to Michael's ability to take an early retirement. Michael testified he was financially unable to take early retirement at this time and had no plans to do so. It is uncertain whether early retirement will be an option available to Michael in the future.
Shannon next argues there is uncertainty regarding the rate of interest to be applied to the retirement funds. Her own valuation of her pension ranged from $61,632.14 to $101,757.22, depending on the rate assumed. Michael's valuation of his pension was provided by his employer. Michael's valuation of Shannon's pension was prepared by a certified public accountant.
Shannon contends the advantages of the percentage method are present in this case because both parties have pensions and, therefore, deferred payment as opposed to a lump sum payment is not an advantage. Michael argues there are disadvantages to using the percentage method in this case; namely, the additional costs and expenses involved in preparation and approval of QDROs for each pension.
Although our review is de novo, we will defer to the trial court when valuations are accompanied with supporting credibility findings or corroborating evidence. In re Marriage of Vieth, 591 N.W.2d 639, 640 (Iowa Ct.App. 1999). The court adopted the valuation of Michael's pension provided by his employer. The valuation of Shannon's pension used by the court was prepared by a certified public accountant. These valuations are consistent with the figures Shannon provided, and are well within the permissible range of evidence. See In re Marriage of Williams, 449 N.W.2d 878, 881 (Iowa Ct.App. 1990) (valuing a marital farm at an amount between the parties' calculations was within the permissible range of evidence). Because we conclude the resulting distribution of pension benefits is equitable, considering the parties work histories, comparable current earnings, and comparable present value of their retirement and savings plans, we affirm the district court.
Michael requests an award of his appellate attorney fees. An award of attorney fees on appeal is not a matter of right, but rests within the discretion of the court. In re Marriage of Benson, 545 N.W.2d 252, 258 (Iowa 1996). We are to consider the needs of the party making the request, the ability of the other party to pay, and whether the party making the request was obligated to defend the district court's decision on appeal. In re Marriage of Wood, 567 N.W.2d 680, 684 (Iowa Ct.App. 1997). We decline to award Michael his attorney fees.